In this article, we will take a look at the 10 best weed stocks to buy now.
While the coronavirus pandemic has wreaked havoc on many industries around the world, the weed industry proved to be antifragile and grew in the period amid rising sales, legalization, medical and recreational benefits. Legal cannabis made history in 2020, with states like New Jersey, Montana, and South Dakota voting to legalize recreational cannabis, as well as states like Arizona and Mississippi approving it.
Cannabis production is already one of the fastest-growing industries globally, but the year 2020 has taken it to the next tier. According to BDSA, a leading cannabis industry research firm, global cannabis revenues hit approximately $21.3 billion in 2020, up 48% from $14.4 billion in 2019. The growing acceptance of marijuana in society and the legalization of cannabis both for medical and recreational use are the major growth catalysts driving the cannabis industry. Global cannabis revenues are expected to increase by more than 17%, from $21.3 billion in 2020 to $55.9 billion in 2026, according to the BDSA.
The Rush to Green Gold
During the Covid-19 pandemic, marijuana stocks performed well as legalization spread to more states and more people started cultivating cannabis at home. One of the weed companies that benefited the most from the pandemic is American marijuana growing-products supplier GrowGeneration Corp. (NASDAQ: GRWG). Via acquisitions, the Colorado-based hydroponic supplier increased its commercial and e-commerce market divisions. As of March 2021, GrowGeneration Corp. (NASDAQ: GRWG) has acquired eight cannabis-related businesses, including California-based hydroponic and organic fertilizer producer 55 Hydroponics, Massachusetts-based hydroponics systems, and nutrients supplier Aquarius Hydroponics, and Colorado-based wholesale equipment supplier for growers Agron.io. GrowGeneration Corp. (NASDAQ: GRWG) recorded a revenue of $194.4 million in 2020. The stock has gained 825.8% in the last twelve months.
As more states legalize marijuana and the industry matures, some of the largest corporations such as American alcohol maker Molson Coors Beer Company (NYSE: TAP) and Belgian beer manufacturer Anheuser-Busch InBev SA/NV (NYSE: BUD) are investing and capitalizing on the industry’s growth. Earlier this year, cannabis firm HEXO Corp. (NYSE: HEXO) formed a partnership with Molson Coors Beer Company (NYSE: TAP) to commercialize alcohol hemp-derived CBD beverages, which the companies named Truss CBD USA. On the other hand, Labatt, Anheuser-Busch InBev SA/NV’s (NYSE: BUD) Canadian subsidiary, is exploring non-alcoholic drinks flavored with tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”), as well as creating a non-alcoholic CBD product to be sold exclusively in Canada.
Notable weed stocks like Jazz Pharmaceuticals (NASDAQ:JAZZ) and Canopy Growth Corp (NASDAQ: CGC) are set to grow as countries begin to understand the benefits of marijuana.
Bank of America recently gave a Buy rating to Canopy Growth Corp (NASDAQ: CGC) stock citing the company’s growth prospects in the US amid legalization and CBD beverage distribution. The bank gave a price target of C$45 to Canopy Growth Corp (NASDAQ: CGC).
Investors are watching Jazz Pharmaceuticals (NASDAQ:JAZZ) after the company completed its $7.2 billion acquisition of GW Pharmaceuticals. The deal would give the company access to GW’s cannabinoid portfolio, including Epidiolex, which made over $510 million in revenue in 2020.
In April, Jazz Pharmaceuticals (NASDAQ:JAZZ), one of the best weed stocks to buy now, announced positive results for its Phase 3 trial of Xywav (calcium, magnesium, potassium, and sodium oxybates) oral solution for the treatment of idiopathic hypersomnia.
If you are looking to diversify your weed stock portfolio, buying shares of Innovative Industrial Properties, Inc. (NYSE: IIPR) might be a good option. The cannabis REIT invests in medicinal cannabis greenhouses and manufacturing facilities. In the first quarter, Innovative Industrial Properties, Inc.’s (NYSE: IIPR) revenue came in at $42.9 million, up 103% from the previous year. The stock has gained 128% in the last twelve months. As of May 5th, the stock trades at $173.07 and pays a dividend yield of 3.05% per share. Innovative Industrial Properties, Inc. (IIPR) is a standard weed stock among analysts, with five Buy recommendations versus two Hold and no Sell recommendations.
It has become extremely important to diversify your portfolio and consider investing in the future amid the volatility in the markets that is causing trouble for even the experts. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is a handy indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by Terre di Cannabis on Unsplash
With this context in mind, here is our list of the 10 best weed stocks to buy now.
Best Weed Stocks to Buy Now
10. OrganiGram Holdings Inc. (NASDAQ: OGI)
Number of Hedge Fund Holders: 4
We start our list of the 10 best weed stocks to buy now with medical marijuana producer OrganiGram Holdings Inc. (NASDAQ: OGI). Founded in 2013, the company is the largest licensed producer of cannabis for both patients and adult recreational users in Canada. OrganiGram Holdings Inc.’s weed portfolio includes Edison Cannabis Co., SHRED, TrailBlazer, and Ankr Organics. OrganiGram Holdings Inc. (NASDAQ: OGI) cultivates its weed on a 14-acre campus in Moncton City. This facility also has its edibles and derivatives factory and the ability to harvest cannabis in-house.
OrganiGram Holdings Inc. (NASDAQ: OGI) has a market cap of $774 million and net revenue of $11.9 million in the second quarter of 2021. Shares of OGI jumped 78% over the past twelve months.
There were 4 hedge funds that reported owning stakes in OrganiGram Holdings Inc. (NASDAQ: OGI) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $12.5 million.
9. HEXO Corp. (NYSE: HEXO)
Number of Hedge Fund Holders: 4
Ranking 9th on the list of the best weed stocks to buy now is Canadian cannabis producer HEXO Corp. (NYSE: HEXO). Hexo Corp, formerly Hydropothecary Corporation, is a consumer packaged goods company that develops and sells cannabis products worldwide. The company is one of Canada’s biggest licensed weed companies, with over 2 million sq. ft of factories in Quebec and Ontario. In 2020, HEXO Corp. and Molson Coors Beer Company (NYSE: TAP) formed a joint venture Truss CBD USA in Colorado, to manufacture alcohol hemp-derived CBD beverages. Earlier this year, Truss CBD USA launched its CBD-infused sparkling water in Colorado.
HEXO Corp. (NYSE: HEXO) has a market cap of $867 million, and the company’s net revenue in the second quarter came in at $26.7 million, up from $13.8 million in 2020. Shares of HEXO surged 255.6% over the past twelve months.
There were 4 hedge funds that reported owning stakes in HEXO Corp. (NYSE: HEXO) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $5.37 million.
8. Aurora Cannabis Inc. (NYSE: ACB)
Number of Hedge Fund Holders: 10
Ranking 8th in our list of 10 best weed stocks to buy now is one of the world’s top cannabis producers Aurora Cannabis Inc. (NYSE: ACB). Based in Edmonton, Canada, the company is one of the pioneer manufacturers of medical and recreational marijuana. The company expanded in 2020, wherein Aurora Cannabis Inc. (NYSE: ACB) purchased one of the fastest-growing hemp-derived product companies in the US, Reliva, for approximately $40 million in stock.
The company has a market cap of $1.7 billion. The company’s revenue in the second quarter came in at $55 million. Aurora Cannabis Inc. (NYSE: ACB) increased 5.8% over the past twelve months.
There were 10 hedge funds that reported owning stakes in Aurora Cannabis Inc. (NYSE: ACB) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $14.6 million. Out of the hedge funds being tracked by Insider Monkey, New York-based investment management firm Levin Capital Strategies is a leading shareholder in the firm with 10,333 shares worth more than $96,000.
7. Cronos Group Inc. (NASDAQ: CRON)
Number of Hedge Fund Holders: 11
Toronto-based cannabinoid company Cronos Group Inc. (NASDAQ: CRON) ranks 7th in our list of 10 best weed stocks to buy now. Cronos Group Inc.’s weed portfolio includes hemp-derived CBD brands PEACE+, Lord Jones, and Happy Dance, two adult-use brands Spinach and COVE, and a global wellness platform, PEACE NATURALS. Oils and gummies are among the CBD-infused items available from the company.
The company has a market cap of $2.9 billion and net revenue of $46.7 million in full-year 2020. The stock has gained 42% in the last twelve months. The stock is currently undervalued according to Raymond James analyst Rahul Sarugaser because its 2018 cannabinoid biosynthesis investments are about to takeoff probably by the third quarter of 2021, as announced by CEO Kurt Schmidt. In 2018, Cronos Group Inc. launched a $122 million partnership with Boston-based biotech firm Ginkgo Bioworks to produce lab-grown cannabinoids.
At the end of the fourth quarter of 2020, 11 hedge funds in the database of Insider Monkey held stakes of Cronos Group Inc. (NASDAQ: CRON), up from 10 in the previous quarter. The total value of these stakes at the end of Q4 is $102.8 million.
6. Tilray, Inc. (NASDAQ: TLRY)
Number of Hedge Fund Holders: 17
Canadian medical and cannabinoid manufacturer Tilray, Inc. (NASDAQ: TLRY) ranks 6th on the list of the best weed stocks to buy now. Founded in 2018, the company is a global cannabis lifestyle and consumer packaged goods producer operating in Canada, the US, Europe, Australia, and Latin America. On May 3rd, Canadian weed companies Tilray, Inc. and Aphria Inc. announced the completion of their merger, forming the world’s largest weed company by revenue.
Like Jazz Pharmaceuticals (NASDAQ:JAZZ), Canopy Growth Corp (NASDAQ: CGC), Anheuser-Busch InBev SA/NV (NYSE: BUD) and Molson Coors Beer Company (NYSE: TAP), Tilray is one of the best long-term stocks to buy.
The company has a market cap of $5.1 billion. In 2020, Tilray’s revenue increased by 26% year to $210.5 million last year, owing to a 153% increase in international medical marijuana sales. Shares of TLRY increased 115% over the past twelve months.
At the end of the fourth quarter of 2020, 17 hedge funds in the database of Insider Monkey held stakes of Tilray, Inc. (NASDAQ: TLRY), up from 6 in the previous quarter. The total value of these stakes at the end of Q4 is $47.6 million.
5. GrowGeneration Corp. (NASDAQ: GRWG)
Number of Hedge Fund Holders: 18
Colorado-based marijuana growing supplies retailer GrowGeneration Corp. (NASDAQ: GRWG) ranks 5th in our list of 10 best weed stocks to buy now. Formerly known as Easylife Corp., the company is the biggest hydroponics supplier in the US, with 53 retail stores across 12 states. The company is one of the fastest-growing weed stocks to buy now. It recently completed its sixth acquisition, as the GrowGeneration Corp. agreed to buy California-based 55 Hydroponics in mid-March.
The company has a market cap of $2.5 billion. In 2020, the company’s net revenue increased 142.5% to 193.4 million compared to $79.7 million in 2019. Shares of GRWG surged 825.8% over the past twelve months.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes of GrowGeneration Corp. (NASDAQ: GRWG), up from 10 in the previous quarter. The total value of these stakes at the end of Q4 is $142 million.
4. Canopy Growth Corporation (NASDAQ: CGC)
Number of Hedge Fund Holders: 19
Canadian cannabis grower Canopy Growth Corporation (NASDAQ: CGC) ranks 4th on the list of the best weed stocks to buy now. Formerly known as Tweed Marijuana Inc., the company is a global leader in diversified cannabis and cannabinoid-based consumer products. The company’s weed offerings are dried flower, oil, soft gel capsule, infused drink, edible, and topical formats. The company’s medical cannabis brand Spectrum Therapeutics commercializes full-spectrum products in Germany and Canada. Canopy holds approximately 10.1% of Canada’s cannabis market.
The company has a market cap of $9.7 billion. The company reported net revenue of $124 million in the third quarter of 2021. Shares of CGC increased 65% over the past twelve months.
At the end of the fourth quarter of 2020, 19 hedge funds in the database of Insider Monkey held stakes of Canopy Growth Corporation (NASDAQ: CGC), up from 9 in the previous quarter. The total value of these stakes at the end of Q4 is $133 million.
3. Innovative Industrial Properties, Inc. (NYSE: IIPR)
Number of Hedge Fund Holders: 23
San Diego-based real estate investment trust (REIT) Innovative Industrial Properties, Inc. (NYSE: IIPR) ranks 3rd in our list of 10 best weed stocks to buy now. Innovative Industrial Properties, Inc. is not a weed producer. We included it in our list because it leases to the fastest-growing cannabis growers in the US, including Cresco Labs Inc. (OTC: CRLBF) and Cresco Labs Inc. (OTC: CURLF). The REIT buys properties and rents them back to marijuana growers. The company owned 69 properties in the United States that were 100% leased to state-licensed medical-use cannabis operators as of April 19th, 2021, totaling approximately 6.2 million rentable square feet.
The company has a market cap of $4 billion and a revenue of $116.9 million in 2020, up 161.7% year over year. Shares of IIPR surged 128% over the past twelve months.
At the end of the fourth quarter of 2020, 23 hedge funds in the database of Insider Monkey held stakes of Innovative Industrial Properties, Inc. (NYSE: IIPR), up from 20 in the previous quarter. The total value of these stakes at the end of Q4 is $318 million.
g0d4ather / shutterstock.com
2. Jazz Pharmaceuticals plc (NASDAQ: JAZZ)
Number of Hedge Fund Holders: 29
Irish biopharmaceutical firm Jazz Pharmaceuticals plc (NASDAQ: JAZZ) ranks 2nd in our list of 10 best weed stocks to buy now. The company’s primary focus is the development and commercialization of pharmaceutical products in the fields of narcolepsy, oncology, pain management, and psychiatry. On May 5th, Jazz Pharmaceuticals plc completed its $7.6 billion acquisition of the UK-based biopharmaceutical company GW Pharmaceuticals plc (NASDAQ: GWPH), the drug company that produces and commercializes cannabinoid prescription medicines used to treat neuropathic pain, cancer pain, and multiple sclerosis. Jazz Pharmaceuticals plc is particularly interested in GW’s Epidiolex, a cannabis-based medicine that treats rare types of childhood epilepsy. The drug has over %510 million in sales in 2020.
The company has a market cap of $9.7 billion. The company’s revenue in the first quarter came in at $607 million, up from $524 million in the same period in 2020. Shares of JAZZ climbed 50.7% over the past twelve months. Analysts from investment banking firm Stifel Nicolaus maintained a Buy rating on Jazz Pharmaceuticals plc in April, with a price target of $202.
At the end of the fourth quarter of 2020, 29 hedge funds in the database of Insider Monkey held stakes of Jazz Pharmaceuticals plc (NASDAQ: JAZZ), up from 28 in the previous quarter. The total value of these stakes at the end of Q4 is $1.34 billion.
1. The Scotts Miracle-Gro Company (NYSE: SMG)
Number of Hedge Fund Holders: 29
Topping the list of the 10 best weed stocks to buy now is Ohio-based hydroponic supplier The Scotts Miracle-Gro Company (NYSE: SMG). Founded in 1868, the company sells garden and lawn products in its US consumer segment. The Scotts Miracle-Gro Company also operates a cannabis segment, namely Hawthorne. The Hawthorne division contains the essential tools that marijuana growers use to harvest their green gold. The company’s cannabis brands include General Hydroponics and soil and fertilizer specialist Vermicrop Organics. Hawthorne also offers growing services, including integrated lighting plans, airflow mapping, and vertical racking layouts.
The company has a market cap of $13.5 billion. In the second quarter of 2021, the company’s sales increased 32% to $1.83 billion compared to $1.38 billion a year earlier. The Hawthorne division saw a 66 percent rise in sales to $363.8 million. In April, Raymond James analysts maintain its Strong Buy rating of The Scotts Miracle-Gro Company with a price target of $300. The stock gained 84% in the last twelve months.
There were 29 hedge funds that reported owning stakes in The Scotts Miracle-Gro Company (NYSE: SMG) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $455 million.
Roubaix Capital, in their Q4 2020 investor letter, said that The Scotts Miracle-Gro Company (NYSE: SMG). Here is what Roubaix Capital has to say about The Scotts Miracle-Gro Company in their letter:
“Companies including Scotts Miracle-Gro (SMG) have seen their sales accelerate to unsustainable levels that are not consistent with their mature end markets. We expect sales to slow and eventually give back some of the one-time gains caused by the unusual circumstances of 2020. Further, we question the sustainability of current peak valuations in the face of likely peak sales. We believe companies with such characteristics could face a combination of negative earnings revisions and lower valuations as the demand reality sets in this year. We also anticipate that companies that have benefited from consumers being homebound will see very challenging comparisons in 2021. No doubt, spending on home improvement and furnishing grew at unsustainable rates in 2020.”
You can also take a peek at 10 Best REIT Stocks To Buy Now and 30 Best Places to Visit in USA in June.
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Disclosure: None. 10 Best Weed Stocks to Buy Now is originally published on Insider Monkey.
