In this article, we discuss the 10 best CBD stocks to invest in. You can skip our detailed analysis of these stocks and the current market situation, and go directly to 5 Best CBD Stocks To Invest In.
With the growing acceptance of cannabis among global consumers and their elected representatives, the CBD market has experienced vast growth due to an increase in sales, legalization, and medical and recreational benefits of the substance. Cannabidiol, or CBD in short, is a constituent of cannabis that is commonly used for medical purposes. Deemed federally illegal before the passage of the 2018 Farm Bill, the compound is used for treating anxiety, dystonia, and Parkinson’s disease, among many other medical conditions. The rising awareness CBD among the general public and its effectiveness in pain management and various other treatments is propelling the industry’s growth. According to a report, the CBD market accounted for approximately $12.8 billion in 2021, and is estimated to grow by roughly 21.7% CAGR between 2022 and 2028.
The global Covid-19 pandemic had an unprecedented impact on the global economy, which inevitably affected the demand for cannabidiol across the world. The global market exhibited growth of 26.42% during 2020, significantly lower than the average year-on-year growth during 2017-2019. However, with market functionality returning to pre-pandemic levels, the cannabis market seems to have a profitable future, due to countries such as the Unites States and Canada liberalizing their laws for cannabidiol products since the past few years, leading to a wider acceptance of the products amongst people. As the demographics of consumers continues to shift radically due to the utility of CBD becoming mainstream among major industries such as food, pharmaceuticals, and cosmetics, the sales of cannabis-related products are gaining huge traction. According to data from Leafly, an online marijuana marketplace, legal U.S. cannabis sales increased by 35% to a total of $24.6 billion in 2021.
The above serves to prove that the cannabidiol industry is set to become a highly lucrative investment opportunity that offers your portfolio an excellent source of growth, with companies like Altria Group, Inc. (NYSE:MO), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Sundial Growers Inc. (NASDAQ:SNDL), and Cronos Group Inc. (NASDAQ:CRON) ready to rake in the benefits due to these developments.
Copyright: thommorrisphotography / 123RF Stock Photo
Our Methodology
For our list, we chose stocks based on their performance in the CBD industry. The business fundamentals and analyst ratings for these firms are also discussed to provide readers with some additional context for their investment choices.
The hedge fund sentiment around each stock was derived from Insider Monkey’s database which tracks 912 hedge funds as of the first quarter of 2022.
10 Best CBD Stocks To Invest In
10. Village Farms International, Inc. (NASDAQ:VFF)
Number Of Hedge Fund Holders: 3
Village Farms International, Inc. (NASDAQ:VFF) is a greenhouse-grown vegetable company that markets agricultural products.
The Company’s wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer and one of the best-selling brands in Canada. On the other hand, the company’s wholly-owned Balanced Health Botanicals operates as one of the leading CBD brands and e-commerce platforms in the United States.
Earlier this May, Craig-Hallum analyst Eric Des Lauriers lowered the price target on Village Farms International, Inc. (NASDAQ:VFF) to $5 from $15 to reflect inflation and macro valuation headwinds. However, the analyst maintained a Buy rating on the shares given the strong near-term growth expected in Canadian cannabis and discount versus peers.
According to Insider Monkey’s database, Village Farms International, Inc. (NASDAQ:VFF) was spotted on 3 investment portfolios by the end of the first quarter of 2022. The total stakes of these funds in the company amounted to approximately $2.43 million. Israel Englander’s Millennium Management is the largest stakeholder in Village Farms International, Inc. (NASDAQ:VFF) , with stakes valued at $2.36 million.
Just like Altria Group, Inc. (NYSE:MO), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Sundial Growers Inc. (NASDAQ:SNDL), and Cronos Group Inc. (NASDAQ:CRON), Village Farms International, Inc. (NASDAQ:VFF) is one of the stocks that investors are keeping their eye on.
9. Sundial Growers Inc. (NASDAQ:SNDL)
Number Of Hedge Fund Holders: 7
Sundial Growers Inc. (NASDAQ:SNDL) is a Canada-based company that is engaged in the business of production, distribution and sale of cannabis and CBD products in Canada. The company’s portfolio brands includes Top Leaf, Sundial Cannabis, Palmetto, and Grasslands. The stock has climbed in the past few days after Rhode Island become the 19th state in the U.S. to legalize recreational marijuana.
On May 3, BMO Capital analyst Tamy Chen upgraded Sundial Growers Inc. (NASDAQ:SNDL) to Market Perform from Underperform with a price target of $0.70, up from $0.60. According to the analyst, the company continues to deploy capital across multiple segments, consisting of cannabis production, retail, and structured investments.
At the end of the first quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $26.87 million in Sundial Growers Inc. (NASDAQ:SNDL), compared to 8 in the preceding quarter worth $10 million. Among these, D.E. Shaw is a leading shareholder in the company, with 33.78 million shares worth more than $23.65 million
8. Aurora Cannabis Inc. (NASDAQ:ACB)
Number Of Hedge Fund Holders: 9
Aurora Cannabis Inc. (NASDAQ:ACB) is a Canadian licensed cannabis producer, headquartered in Edmonton, Canada. The stock surged on April 11 as authorities in New Jersey stated that a select group of cannabis firms will be allowed to sell recreational marijuana products within weeks. Additionally, the company also purchased rival vertically integrated cannabis firm TerraFarma for $38 million back in March.
Earlier this May, Cantor Fitzgerald analyst Pablo Zuanic maintained a Neutral rating on the shares of Aurora Cannabis Inc. (NASDAQ:ACB) with a C$3.90 price target. According to the analyst, the company increased cash cost savings targets which gives further credence to its goal of becoming EBITDA positive by this coming December on a run rate basis.
At the end of the first quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $40.8 million in Aurora Cannabis Inc. (NASDAQ:ACB), down from 11 the preceding quarter worth $69.6 million.
7. Cronos Group Inc. (NASDAQ:CRON)
Number Of Hedge Fund Holders: 9
Cronos Group Inc. (NASDAQ:CRON) is a company focused on medical marijuana and recreational cannabis for adult use that is best known for producing, selling, and marketing products in Canada, Germany, Israel, Italy and Australia. Shares of the global cannabis company rocketed up 13.5% after it reported its earnings for the first three months of 2022.
CIBC analyst John Zamparo upgraded Cronos Group Inc. (NASDAQ:CRON) to Outperform from Neutral with an unchanged price target of $4.50 on May 13. According to Zamparo, the company’s shares provided downside protection and upside from a potential continuation of vastly improved results. He also adds that he sees “multiple reasons for optimism,” stating that the company still has $1 billion in net cash, its valuation “looks attractive,” and its path to profitability took a “significant step forward” in Q1.
According to the first quarter database of Insider Monkey, 9 hedge funds held long positions in Cronos Group Inc. (NASDAQ:CRON), compared to 11 funds in the earlier quarter. The total stakes owned in Q1 amounted to $48.14 million. Traci Lerner’s Chescapmanager LLC is the leading shareholder in Cronos Group Inc. (NASDAQ:CRON), with 8.32 million shares worth more than $32.39 million.
6. Cara Therapeutics, Inc. (NASDAQ:CARA)
Number Of Hedge Fund Holders: 13
Cara Therapeutics, Inc. (NASDAQ:CARA) is an early commercial-stage biopharmaceutical company focused on developing and commercializing medication and therapeutics to treat diseases associated with pain and inflammation. The company is also developing orally administered cannabinoid receptor (CB) agonists for the treatment of neuropathic pain and inflammation.
Earlier this May, H.C. Wainwright analyst Oren Livnat “strongly” reiterated a Buy rating on Cara Therapeutics, Inc. (NASDAQ:CARA) with a $30 price target on its shares. The analyst, who believes the profitability of IV Korsuva and Cara’s profit-split revenue will “positively surprise investors,” noted that he looks forward to the Q2 results to get the first look at net IV Korsuva sales.
At the end of the first quarter of 2022, 13 hedge funds in the database of Insider Monkey held stakes worth $75.8 million in Cara Therapeutics, Inc. (NASDAQ:CARA), compared to 15 in the preceding quarter worth $69.3 million. Out of the hedge funds being tracked by Insider Monkey, Thomas Steyer’s Farallon Capital is a leading shareholder in Cara Therapeutics, Inc. (NASDAQ:CARA), with 2.5 million shares worth more than 30.37 million.
Similar to Altria Group, Inc. (NYSE:MO), Jazz Pharmaceuticals plc (NASDAQ:JAZZ), Sundial Growers Inc. (NASDAQ:SNDL), and Cronos Group Inc. (NASDAQ:CRON), Cara Therapeutics, Inc. (NASDAQ:CARA) is a notable CBD stock to buy.
Click to continue reading and see the 5 Best CBD Stocks To Invest In.
Suggested Articles:
- 10 Most Profitable Biotech Companies in the World
- 10 Oil Tanker Stocks That Pay Dividends
- 10 Best Long-Term Dividend Stocks with Over 4% Yield
Disclose. None. 10 Best CBD Stocks To Invest In is originally published on Insider Monkey.
