11 Best CBD Stocks To Buy Now

In this article, we discuss 11 best CBD stocks to buy now.

The cannabis industry in 2022 had mixed results. While some new markets experienced significant growth, sales in many established markets decreased, slowing or even reversing growth in those areas. This can partly be attributed to the impact of COVID-19 on the wider economy, but it resulted in numerous companies facing challenges such as job cuts, financial difficulties, and increased debt.

However, 2022 had its positive aspects as well. Three more American states passed laws legalizing the use of cannabis for adults, and recreational sales were launched in other states. On a federal level, the Biden administration made progress towards reform by pardoning federal offenses for simple marijuana possession and directing a review of the classification of cannabis under federal law. Additionally, Congress passed the Medical Marijuana and Cannabidiol Research Expansion Act. At the same time, legal retailers continue to struggle with onerous taxes, regulations, and competition from the illegal market. Many of these same challenges are likely to persist throughout 2023, including the slump in wholesale and retail cannabis prices.

The growth rate of legal cannabis sales in the United States, which does not require federal legalization, is expected to increase at a rate with double-digit annual compound growth, said Cowen analyst Vivien Azer in a report on January 10. According to Rick Maturo, the Director of Insights and Intelligence for the cannabis data company BDSA, the pressure of lowering prices and competition from illegal sources will lead to a consolidation of the thousands of US cannabis brands. He also suggested that the sales projections for cannabis in New York may decrease due to the state’s difficulty in combating the illicit market and issues with establishing social equity licensees. At the same time, Maturo predicts an increase in the marketing of premium edible and concentrated products that are marketed as containing “solventless” cannabinoids.

Marijuana is rapidly gaining popularity in multiple states. A recent poll by the Hobby School of Public Affairs at the University of Houston shows that the majority of Texans support the legalization of medical marijuana. According to the poll results, 82% of Texans are in favor of the Legislature passing a bill that would allow people to use marijuana for medical purposes with a prescription. Additionally, 56% of those polled strongly support medical marijuana. The support was consistent across different demographics, with 85% of Latino Texans, 83% of Black Texans, 80% of white Texans, 83% of women, 80% of men, 93% of Democrats, 79% of independents, and 73% of Republicans all expressing approval. 

Some of the best marijuana stocks to consider include Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY). 

Our Methodology 

We selected the following marijuana stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Copyright: atomazul / 123RF Stock Photo

Best CBD Stocks To Buy Now

11. GrowGeneration Corp. (NASDAQ:GRWG)

Number of Hedge Fund Holders: 5

GrowGeneration Corp. (NASDAQ:GRWG) was founded in 2008 and is based in Greenwood Village, Colorado. GrowGeneration Corp. (NASDAQ:GRWG) is involved in the hydroponic and organic gardening retail industry in the US. It sells and markets products such as nutrients, lighting, environmental control systems, and accessories for hydroponic gardening and other indoor and outdoor growing. Its target customers are commercial and urban cultivators who grow specialty crops like organic greens and plant-based medicines. In March 2021, GrowGeneration Corp. (NASDAQ:GRWG) acquired Aquarius Hydroponics, an indoor-outdoor garden supply center specializing in hydroponics systems, lighting, and nutrients, representing its entry into Massachusetts’ cannabis market. 

On November 16, GrowGeneration Corp. (NASDAQ:GRWG) formed a strategic partnership with Grodan, a leading producer of stone wool growing media solutions for hydroponics operations. The partnership between GrowGeneration and Grodan will strengthen GrowGen’s market position and expand the availability of Grodan products to more customers at competitive prices.

Alliance Global Partners analyst Aaron Grey on November 8 maintained a Neutral rating on GrowGeneration Corp. (NASDAQ:GRWG) and lowered the firm’s price target on the shares to C$4 from C$4.50 following the Q3 results. The analyst cited uncertainty about when the growth of the industry will return to a sustainable level due to the absence of promotional activity.

According to Insider Monkey’s data, 5 hedge funds were bullish on GrowGeneration Corp. (NASDAQ:GRWG) at the end of the third quarter of 2022, compared to 4 funds in the prior quarter. The collective stakes in Q3 2022 amounted to $7.3 million, up from $6.2 million in Q2. D E Shaw is the biggest stakeholder of the company, with 889,524 worth $3.1 million. 

Like Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY), GrowGeneration Corp. (NASDAQ:GRWG) is one of the best marijuana stocks to montior. 

10. Village Farms International, Inc. (NASDAQ:VFF)

Number of Hedge Fund Holders: 6

Village Farms International, Inc. (NASDAQ:VFF) was founded in 1989 and is headquartered in Delta, Canada. The company, along with its subsidiaries, grows, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. It operates through four business segments – Produce, Cannabis-Canada, Cannabis-U.S., and Energy. Village Farms International, Inc. (NASDAQ:VFF) is also involved in the production and distribution of cannabis products to licensed providers and government agencies in Canada and other countries. It develops and sells cannabinoid-based health and wellness products including ingestible, edibles, and topical products. It is one of the best marijuana stocks to invest in. 

On January 3, Village Farms International, Inc. (NASDAQ:VFF) announced the advancement of its international cannabis strategy by starting to ship cannabis products to Israel. Village Farms International, Inc. (NASDAQ:VFF) also disclosed that it is continuing to implement its global cannabis strategy, which includes increased sales in the Australian medical market and plans to enter the German medical market.

Alliance Global Partners analyst Aaron Grey on February 3 maintained a Buy recommendation on Village Farms International, Inc. (NASDAQ:VFF) but lowered the firm’s price target on the shares to $3 from $6. This change is due to the recent equity raise by the company and the anticipated trends for Q4. The analyst acknowledged the continued cash burn from produce but still views Village Farms International, Inc. (NASDAQ:VFF) as a stable player in the cannabis industry and has seen consistent share performance over the past two years among Canadian LPs.

According to Insider Monkey’s third quarter database, 6 hedge funds were bullish on Village Farms International, Inc. (NASDAQ:VFF), compared to 5 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with 249,661 shares worth $477,000. 

9. Clever Leaves Holdings Inc. (NASDAQ:CLVR)

Number of Hedge Fund Holders: 6

Clever Leaves Holdings Inc. (NASDAQ:CLVR) is a Florida-based cannabis company engaged in the cultivation, extraction, manufacturing, commercialization, and distribution of cannabinoid products internationally. The Non-Cannabinoid segment of the company is involved in the creation, production, promotion, sale, distribution, and commercialization of nutraceuticals and other natural remedies, wellness products, detoxification products, and nutritional and dietary supplements. It is one of the best marijuana stocks to monitor. 

On November 11, Canaccord analyst Bobby Burleson downgraded Clever Leaves Holdings Inc. (NASDAQ:CLVR) from Buy to Hold and lowered the price target on the shares to 80 cents from $3. He believes that Clever Leaves Holdings Inc. (NASDAQ:CLVR) has established a strong business to meet the demand for global cannabis, but he is being cautious about the timing of significant revenue growth. The trimmed price target is due to the lower earnings estimates and general reduction in valuations for the cannabis sector, according to the analyst.

According to Insider Monkey’s Q3 data, 6 hedge funds were long Clever Leaves Holdings Inc. (NASDAQ:CLVR), compared to 5 in the last quarter. Thomas Steyer’s Farallon Capital is the largest stakeholder of the company, with 2.46 million shares worth $1.48 million. 

8. Organigram Holdings Inc. (NASDAQ:OGI)

Number of Hedge Fund Holders: 7

Organigram Holdings Inc. (NASDAQ:OGI) was incorporated in 2010 and is headquartered in Toronto, Canada. The company engages in the production and sale of cannabis and cannabis-derived products in Canada. It offers medical cannabis products, such as cannabis flowers, gummies, cannabis oils, vaporizers, cannabis edibles, and concentrates. Organigram Holdings Inc. (NASDAQ:OGI) is one of the premier marijuana stocks to consider. 

On January 12, Organigram Holdings Inc. (NASDAQ:OGI) reported a Q1 net income of $5.33 million, and revenue for the period climbed 42.4% year-over-year to $43.3 million, beating Wall Street estimates by $10.89 million. The company anticipates that its revenue for FQ2 2023 will be higher than its revenue for FQ2 2022. 

Stifel analyst Andrew Partheniou upgraded Organigram Holdings Inc. (NASDAQ:OGI) on January 13 to Buy from Hold with an unchanged price target of C$1.50, due to the company’s strong Q1 results, which showed profitability that exceeded expectations and significant cash generation. The analyst has also raised his profitability estimates to reflect the Q1 performance, the company’s production expansions and innovative efforts, and management’s gross margin guidance.

According to Insider Monkey’s third quarter database, Organigram Holdings Inc. (NASDAQ:OGI) was part of 7 hedge fund portfolios, with collective stakes worth $3.7 million. D E Shaw held the largest stake in the company, with 2.4 million shares worth $2.15 million. 

7. Cronos Group Inc. (NASDAQ:CRON)

Number of Hedge Fund Holders: 8

Cronos Group Inc. (NASDAQ:CRON) was founded in 2012 and is based in Toronto, Canada. Cronos Group Inc. (NASDAQ:CRON) is a cannabinoid company that operates in the hemp-based supplement and cosmetic product market. The company sells its products through e-commerce, retail, and hospitality channels under the Lord Jones and Happy Dance brands in the US. Additionally, Cronos Group Inc. (NASDAQ:CRON) is involved in the cultivation, production, and sales of medical and adult-use cannabis and its related products, and also exports dried cannabis and cannabis oils to several international markets, including Germany, Israel, and Australia.

On November 8, investment advisory Canaccord maintained a Buy rating on Cronos Group Inc. (NASDAQ:CRON) but lowered the firm’s price target on the shares to C$4.75 from C$5. Analyst Matt Bottomley issued the ratings update. 

According to Insider Monkey’s data, 8 hedge funds were long Cronos Group Inc. (NASDAQ:CRON) at the end of Q3 2022, compared to 5 funds in the prior quarter. Traci Lerner’s Chescapmanager LLC is the largest stakeholder of the company, with 8.3 million shares worth $23.4 million. 

6. Aurora Cannabis Inc. (NASDAQ:ACB)

Number of Hedge Fund Holders: 9

Aurora Cannabis Inc. (NASDAQ:ACB) is headquartered in Edmonton, Canada. The company produces, distributes, and sells cannabis and its derivative products globally, with a focus on Canada. Aurora Cannabis Inc. (NASDAQ:ACB) provides medical and consumer cannabis products and is involved in wholesale medical cannabis distribution in the European Union and various international markets, as well as the distribution of hemp-based CBD products in the United States. The company’s portfolio of cannabis products include dried cannabis, oils, capsules, edibles, and extracts. 

On January 4, Aurora Cannabis Inc. (NASDAQ:ACB) announced that it has completed the sale of its Aurora Polaris property for a total of approximately $15 million. Additionally, Aurora Cannabis confirmed that it still expects to achieve adjusted EBITDA profitability in the second fiscal quarter. It has a strong financial position with a net cash balance, boasting approximately $320 million in cash and cash equivalents, including about $63 million in restricted cash. 

Stifel analyst W. Andrew Carter on January 27 maintained a Hold rating on Aurora Cannabis Inc. (NASDAQ:ACB) and lowered the firm’s price target on the shares to C$1.45 from C$1.75. 

According to Insider Monkey’s Q3 data, Aurora Cannabis Inc. (NASDAQ:ACB) was part of 9 hedge fund portfolios, compared to 10 in the last quarter. Jim Simons’ Renaissance Technologies is a significant position holder in the company, with 4.25 million shares worth $5.18 million.

In addition to Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY), elite investors are piling into Aurora Cannabis Inc. (NASDAQ:ACB) for exposure to the marijuana industry.

5. Innovative Industrial Properties, Inc. (NYSE:IIPR)

Number of Hedge Fund Holders: 12

Innovative Industrial Properties, Inc. (NYSE:IIPR) is a Maryland-based company specializing in acquiring, owning, and managing properties that are leased to licensed operators for medical cannabis facilities. The company has chosen to be treated as a real estate investment trust for tax purposes. It is one of the best marijuana stocks to invest in. Innovative Industrial Properties, Inc. (NYSE:IIPR) paid a $1.80 per share quarterly dividend to shareholders on January 13, with a forward yield of 6.31%. 

On January 19, Innovative Industrial Properties, Inc. (NYSE:IIPR) reported that as of December 31, 2022, it owned 110 properties in 19 states. During 2022, the company made 9 acquisitions of properties in 7 states and revised 12 leases to allow for additional improvements at properties located in 7 states. The company’s financial status as of December 31, 2022 showed that its debt constituted 12% of its total gross assets, with approximately $2.6 billion in total assets and a quarterly fixed cash interest obligation of around $4.2 million. It had no secured debt and no debt maturing until May 2026.

BTIG analyst Thomas Catherwood on January 24 maintained a Buy rating on Innovative Industrial Properties, Inc. (NYSE:IIPR) but lowered the firm’s price target on the shares to $179 from $196. 

According to the third quarter database of Insider Monkey, 12 hedge funds were long Innovative Industrial Properties, Inc. (NYSE:IIPR), compared to 16 in the prior quarter. Stuart J. Zimmer’s Zimmer Partners is the latest stakeholder of the company, with 1.95 million shares worth $172.5 million. 

4. WM Technology, Inc. (NASDAQ:MAPS)

Number of Hedge Fund Holders: 15

WM Technology, Inc. (NASDAQ:MAPS) is a California-based provider of e-commerce and compliance software solutions to retailers and brands in the cannabis industry worldwide, including in the United States and Canada. Its offerings include the Weedmaps marketplace, which allows cannabis consumers to search for and view products from retailers and brands, and reserve products from local stores. Additionally, WM Technology, Inc. (NASDAQ:MAPS) provides information on cannabis and the industry, as well as advocacy services for legalization. It is one of the best marijuana stocks to monitor. 

On November 8, Canaccord analyst David Hynes reiterated a Buy rating on WM Technology, Inc. (NASDAQ:MAPS) but lowered the firm’s price target on the shares to $4.75 from $6. The analyst noted that data from California, which accounts for more than half of the company’s business, showed a 10% decrease in licensed sales in the quarter. Despite the difficult market conditions, Hynes stated that WM Technology, Inc. (NASDAQ:MAPS) was able to maintain a stable performance year-over-year.

According to Insider Monkey’s data, 15 hedge funds were bullish on WM Technology, Inc. (NASDAQ:MAPS) at the end of Q3 2022, compared to 14 funds in the earlier quarter. Richard Mashaal’s Rima Senvest Management is the largest stakeholder of the company, with 7.35 million shares worth $11.8 million. 

3. Tilray Brands, Inc. (NASDAQ:TLRY)

Number of Hedge Fund Holders: 16

Tilray Brands, Inc. (NASDAQ:TLRY) is involved in multiple aspects of the medical cannabis industry, including research, growing, manufacturing, advertising, and distributing its products globally, including in Canada, the US, Europe, Australia, New Zealand, Latin America and other countries. It operates through four divisions – the Cannabis division, the Distribution division, the Beverage Alcohol division, and the Wellness division. On January 12, Tilray Brands, Inc. (NASDAQ:TLRY) announced a rebranding of their cannabis wellness brand, Solei, and unveiled new product offerings, including Solei Slims and Solei CBN Softgels.

On January 10, MKM Partners analyst Bill Kirk maintained a Neutral rating on Tilray Brands, Inc. (NASDAQ:TLRY) and lowered the firm’s price target on the shares to $3 from $4. 

According to Insider Monkey’s data, Tilray Brands, Inc. (NASDAQ:TLRY) was part of 16 hedge fund portfolios at the end of the third quarter of 2022, compared to 14 in the prior quarter. D E Shaw is a significant position holder in the company, with 3.4 million shares worth $9.3 million. 

2. The Scotts Miracle-Gro Company (NYSE:SMG)

Number of Hedge Fund Holders: 29

The Scotts Miracle-Gro Company (NYSE:SMG) was founded in 1868 and is headquartered in Marysville, Ohio. The company is involved in the production, advertising, and distribution of lawn, garden, indoor gardening, and hydroponic gardening products in the United States and globally. Hawthorne Gardening Company, a subsidiary of The Scotts Miracle-Gro Company (NYSE:SMG), has acquired the leading companies in hydroponics, lighting, and other supplies needed for cultivation. Now, Scotts is increasing its involvement by supporting legalization efforts through lobbying and investing in ventures that could allow it to sell cannabis products directly to consumers in the future. The Scotts Miracle-Gro Company (NYSE:SMG) is one of the best marijuana stocks to monitor. 

On January 23, The Scotts Miracle-Gro Company (NYSE:SMG) declared a quarterly dividend of $0.66 per share, in line with previous. The dividend is payable on March 10, to shareholders of record on February 24. The forward yield was 4.11%. On February 1, the company reported market-beating FQ1 results, and it expects free cash flow of $1 billion over the next two years. 

According to Insider Monkey’s Q3 data, 29 hedge funds were bullish on The Scotts Miracle-Gro Company (NYSE:SMG), compared to 25 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with 1.5 million shares worth $67.3 million. 

Madison Funds made the following comment about The Scotts Miracle-Gro Company (NYSE:SMG) in its Q4 2022 investor letter:

“Stock selection was the poorest for us in this sector. Two stocks in particular – Hain Celestial (HAIN) and The Scotts Miracle-Gro Company (NYSE:SMG) – while big winners for us in 2020 and 2021, hurt the portfolio in 2022.

While both companies were so-called COVID beneficiaries (businesses that benefited from consumers staying home and spending on their homes during COVID), we felt they possessed certain additional drivers that would maintain their fundamentals into 2022 and beyond.

Scott’s Miracle-Gro is arguably one of the great American franchises. The brand is synonymous with lawn care and pest control, has a dominant market share (~60%) with historically-impressive ~30% cash flow margins, and has the country’s largest Cannabis supply business. Scotts’ core business saw a significant windfall during COVID lockdowns. Lawn and garden care is not a growth business, and SMG dominance does not allow for much incremental gain in market share. However, our thesis was that even in a reopening scenario where lawn and garden businesses would revert to the mean, the cannabis market was poised for years of growth as more states legalized recreational use.

What we missed was the highly inefficient structure of the U.S. cannabis market. Currently, California, Colorado, and Michigan have the biggest and most mature markets. However, over the course of the last few years, several very large states and regions have voted to legalize recreational use, including New York, New Jersey, and Connecticut. The fly in the ointment has been Oklahoma, which is a medical marijuana state. Although recreational use is still prohibited, licenses to grow the crop were granted in Laissez Faire fashion to anyone willing to buy one. Oklahoma began to grow and cultivate the crop far in excess of their medical marijuana demand. That excess supply bled into gray markets across the country, devastating pricing for growers in other states. This glut put a near complete stop to capital spending on grow operations. With no new or incremental facilities coming on, Scotts’ Hawthorne business was cut in half from its peak in F21. This, of course, had a devastating effect on the stock.”

1. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)

Number of Hedge Fund Holders: 43

Jazz Pharmaceuticals plc (NASDAQ:JAZZ) was incorporated in 2003 and is headquartered in Dublin, Ireland. The biopharmaceutical company, through its industry-leading GW Cannabinoid Platform, is a leading expert in cannabinoid science and uses cannabis-based medicines to revolutionize treatment for diseases that are often overlooked and change the definition of living with such conditions. It is one of the best marijuana stocks to monitor. 

On December 8, Goldman Sachs analyst Madhu Kumar upgraded Jazz Pharmaceuticals plc (NASDAQ:JAZZ) to Buy from Neutral with a price target of $190, down from $192. The analyst cited his positive outlook on operating margin performance and the potential for multiple upside levers. 

According to Insider Monkey’s Q3 data, 43 hedge funds were bullish on Jazz Pharmaceuticals plc (NASDAQ:JAZZ), compared to 40 funds in the preceding quarter. Bernard Horn’s Polaris Capital Management is the leading stakeholder of the company, with 1.47 million shares worth $196 million. 

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Disclosure: None. 11 Best CBD Stocks To Buy Now is originally published on Insider Monkey.