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.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have underperformed the broader market. MJ has provided a total return of -7.9% over the past 12 months, well below the Russell 1000’s total return of 30.4%. These market performance numbers and all statistics in the tables below, except for the “Fastest Growing Marijuana Stocks” table, are as of Nov. 24, 2021. The statistics in the growth table are as of Nov. 30, 2021.
Below we look at the top five marijuana stocks with the best value, the fastest growth, and the most momentum.
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.
- HEXO Corp.: HEXO is a Canada-based consumer-packaged goods cannabis company offering recreational and medical products to serve the global cannabis market. The company’s recreational brands for the Canadian adult-use market include HEXO, HEXO Plus, Up, Original Stash, and Bake Sale. It serves the medical market under its HEXO medical cannabis brand. HEXO’s stock also trades in Canada on the Toronto Stock Exchange (TSX) under the ticker HEXO.TO. On Oct. 18, the company announced the departure of co-founder and Chief Executive Officer (CEO) Sebastien St-Louis in a major shakeup of the executive ranks. The company also announced the resignation of Chief Operating Officer (COO), Donald Courtney, who will remain as COO until a replacement is found. Two days later, HEXO named Scott Cooper as the company’s new president and CEO. Cooper previously served as president and CEO of Truss Beverage Co., a joint venture (JV) between Molson-Coors Canada and HEXO.
- High Tide Inc.: High Tide is a Canada-based company engaged in the manufacture and retail of cannabis accessories. The company operates a cannabis retail chain in Canada, three accessories e-commerce platforms, and also is a global manufacturer and distributor of consumption accessories. Its brands include Canna Cabana, Meta Cannabis, NewLeaf Cannabis, Grasscity, Smoke Cartel, Daily High Club, DankStop, CBDcity, FAB CBD, Blessed CBD, Valiant Distribution, and Famous Brandz. High Tide’s online platforms had nearly 100 million site visits in 2020. The company’s stock also trades in the U.S. on the Nasdaq under the ticker HITI. The company recently announced an agreement to acquire 80% of NuLeaf Naturals LLC, a producer and distributor of premium cannabinoid wellness products, for approximately $31.2 million. Under the terms of the deal, it will also have a three-year option to acquire the remaining 20% of NuLeaf at any time.
- Village Farms International Inc.: Village Farms International is a Canada-based vertically integrated greenhouse produce company. In addition to growing, producing, and distributing fresh to national grocers in North America, the company also produces cannabis. 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. Village Farms’ stock also trades in Canada on the TSX under the ticker VFF.TO. The company announced in mid-November that it has acquired 70% of ROSE LifeScience, a vertically-integrated branded cannabis producer, for CA$46.7 million ($36.5 million) in cash and Village Farms shares.
- GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products and one of the largest hydroponics suppliers in the country. The company operates retail hydroponic and organic specialty gardening retail outlets. It offers thousands of products, including plant nutrition, farming soils, advanced lighting technology, and hydroponic and aquaponic equipment. It owns and operates 62 retail and distribution centers. GrowGeneration recently announced the termination of its previously announced acquisition of HGS Hydro. The termination was mutually agreed upon by both companies. GrowGeneration also announced its acquisition of All Seasons Gardening, a garden supply center based in New Mexico. Financial terms of the transaction were not disclosed.
- Cresco Labs Inc.: Cresco Labs is involved in growing, manufacturing, distribution, and packaging of 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 recently announced that it has closed its acquisition of Bay LLC, which operates three dispensaries and does business under the name “Cure Pennsylvania”. The acquisition was first announced in late September 2021 with a transaction value of $90 million.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
|Fastest Growing Marijuana Stocks|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|GrowGeneration Corp. (GRWG)||16.78||1.0||110.9|
|Verano Holdings Corp. (VRNO.CX)||CA$14.57||CA$3.0||106.0|
|Jushi Holdings Inc. (JUSH.CX)||CA$5.05||CA$0.9||104.9|
|Ayr Wellness Inc. (AYR.A.CX)||CA$21.81||CA$1.5||100.0|
|High Tide Inc. (HITI.V)||CA$7.99||CA$0.4||99.4|
- GrowGeneration Corp.: See above for company description.
- 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: Verano, Avexia, Encore, and MÜV. It owns and operates 11 cultivation and manufacturing facilities and 87 retail locations in a number of states throughout the U.S. The company’s stock also trades OTC in the U.S. under the ticker VRNOF.
- 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 mid-November that it has agreed to acquire NuLeaf Inc., a Nevada-based, vertically-integrated operator, for $62.5 million. The acquisition is expected to close during the first half of 2022.
- 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 OTC in the U.S. under the ticker AYRWF. The company recently announced that it has agreed to acquire Gentle Ventures LLC, which owns and operates two licensed retail dispensaries in Chicago and does business under the name “Dispensary 33”. Under the terms of the deal, Ayr Wellness will pay $55 million upfront with an earnout payable if certain adjusted EBITDA performance is achieved through Q3 2022.
- High Tide Inc.: See above for company description.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the past 12 months.
|Marijuana Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Sundial Growers Inc. (SNDL)||0.67||1.4||179.2|
|High Tide Inc. (HITI.V)||CA$8.50||CA$0.4||176.4|
|OrganiGram Holdings Inc. (OGI)||2.03||0.6||81.3|
|Innovative Industrial Properties Inc. (IIPR)||261.49||6.3||74.7|
|Tilray Inc. (TLRY)||10.50||4.9||57.2|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-7.9|
- 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 announced on Nov. 11 that its board of directors has approved a new share repurchase program authorizing the company to repurchase up to CA$100 million ($78.1 million) of its outstanding common shares. The number of shares to be purchased and the timing of those purchases will be determined by the company’s management and board. The repurchase program will expire on Nov. 19, 2022.
- High Tide 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.
- 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 regulated 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. Innovative Industrial Properties announced in October that it has acquired a 201,000 square foot industrial property in California and entered into a long-term lease with Gold Flora LLC. The purchase price of the property was $51.0 million. Gold Flora is a vertically-integrated operator with extensive experience in the regulated cannabis industry. The operator is expected to complete tenant improvements on the property for which Innovative Industrial Properties will provide reimbursement of $9.0 million, bringing the total expected investment in the property to be $60.0 million.
- Tilray Inc.: Tilray is a Canada-based cannabis lifestyle and consumer-packaged goods company with global operations. The company engages in cannabis research, cultivation, and distribution. It sells various cannabis products, hemp-based foods, and alcoholic beverages. Tilray offers products under more than 20 brands in more than 20 countries in North America, Europe, Australia, and Latin America.
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