In this article, we will discuss 11 Best Pot Stocks to Buy According to Hedge Funds.
The global cannabis industry is undergoing a structural transformation as legalization expands for both medical and adult use across multiple regions. Countries such as Canada and Germany, along with 24 U.S. states, have established regulated recreational markets, while others, including Uruguay, Malta, Luxembourg, South Africa, and Thailand, have adopted varying legalization frameworks. As the industry transitions from illicit markets to regulated systems, analysts project the global market could approach $100 billion by 2026 and potentially exceed $400 billion by 2030.
Growth is being driven by expanding legalization, rising medical adoption, and the development of ancillary services ranging from packaging to compliance and consulting. Industrial hemp, used in textiles, food products, and wellness applications, adds another dimension to the sector’s addressable market. In the United States, a proposed move by the Drug Enforcement Administration to reclassify marijuana from Schedule I to Schedule III represents a significant potential catalyst. Such a shift could ease punitive tax treatment under IRS Code 280E, improve cash flow, and broaden access to banking services.
Investing in cannabis stocks is fundamentally a bet on the long-term normalization of a once-illicit industry that is steadily transitioning into a regulated global market. As legalization expands across medical and recreational channels, the addressable market continues to widen, with projections suggesting global sales could approach $100 billion by 2026 and potentially exceed $400 billion by 2030. For many investors, the sector represents a high-risk, high-reward opportunity to gain exposure at a relatively early stage of a structurally evolving industry.
The most compelling driver is long-term growth potential. Legalization momentum at the state and national levels continues to unlock new markets, while many countries remain untapped, providing a substantial runway for future expansion. Analysts forecast strong compound annual growth rates over the coming decade, supported by rising consumer acceptance and product innovation.
In the United States, a potential catalyst lies in the proposed reclassification of marijuana by the Drug Enforcement Administration from Schedule I to Schedule III. If finalized, this shift could ease punitive tax treatment under IRS Code 280E, improve operating cash flow, and expand access to traditional banking services—materially strengthening industry fundamentals.
The sector also offers diverse investment pathways, including multi-state operators, ancillary service providers supplying equipment and infrastructure, biotech firms developing cannabis-based therapies, and diversified ETFs. After a prolonged downturn between 2021 and 2024, valuations across many cannabis equities have compressed to more attractive levels, potentially offering long-term entry points.
Still, investors must weigh notable risks, including high volatility, regulatory uncertainty, and competition from illicit markets. Careful stock selection and a long-term horizon remain essential.
With this context in mind, here is a list of the 11 best pot stocks to buy according to hedge funds.
Our Methodology
We sifted through ETFs, screeners, and online rankings to identify the best pot stocks to buy according to hedge funds. From the resultant dataset, we limited our final selection to 11 pot companies that have recently reported noteworthy developments likely to impact investor sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11 Best Pot Stocks to Buy According to Hedge Funds
11. Aurora Cannabis Inc. (NASDAQ:ACB)
On February 17, Canaccord initiated coverage of Aurora Cannabis Inc. (NASDAQ:ACB) with a Buy rating and C$10 price target. The analyst characterizes the company as the leading medical cannabis operator in Canada and a foremost participant in key international medical markets, including Germany, Poland, Australia, and the United Kingdom. According to the initiation note, Aurora’s strategic domestic pivot toward a medical-first model has enabled expansion into structurally higher-margin international markets, where gross margins are approximately 2.5 times higher on average than those generated in its Canadian medical business. The firm views this mix shift as a durable driver of profitability and earnings quality.
Aurora Cannabis Inc. (NASDAQ:ACB) reported Q3 fiscal 2026 results on February 4 and reaffirmed its medical-first strategic direction. Management guided fiscal 2026 global medical cannabis net revenue growth of 10%–15% to $269–$281 million. Medical revenue represented approximately 81% of total net revenue and roughly 95% of adjusted gross profit in Q3, underscoring the segment’s earnings leverage. The company forecast consolidated adjusted EBITDA of $52–$57 million, representing 5%–10% year-over-year growth, alongside sustained strong adjusted gross margins (62% consolidated and 69% for medical in Q3).
Plant propagation revenue is expected to follow typical seasonality, with 65%–75% generated in the first half of the calendar year. Management noted one-time Q4 cash costs associated with exiting select Canadian consumer markets but expects EBITDA improvement thereafter. Aurora also filed an at-the-market program for up to $100 million to fund accretive initiatives such as cultivation expansion and M&A. The quarter closed with $154 million in cash and no cannabis-related debt, reinforcing balance sheet flexibility.
Founded in 2006 and headquartered in Alberta, Canada, Aurora Cannabis Inc. (NASDAQ:ACB) cultivates, produces, and distributes medical and recreational cannabis products under federal licensing frameworks.
10. Organigram Global Inc. (NASDAQ:OGI)
On February 19, Canaccord raised its price target on Organigram Global Inc. (NASDAQ:OGI) to C$4 from C$3 and maintained a Buy rating.
That same day, Organigram Global Inc. (NASDAQ:OGI) announced a subscription agreement with BT DE Investments, a wholly owned subsidiary of British American Tobacco, in connection with its previously announced proposed acquisition of Sanity Group, including BAT’s stake. Under the agreement, BAT will subscribe for 14,027,074 shares at C$3.00 per share for gross proceeds of C$42.08 million and exercise certain top-up rights to acquire an additional 9,897,356 shares at C$2.335854 per share for C$23.12 million in proceeds, totaling approximately C$65.2 million. The capital infusion strengthens Organigram’s liquidity profile and strategic alignment with BAT as it expands internationally. ATB Financial is acting as the sole lead arranger and bookrunner.
On February 24, Organigram Global Inc. (NASDAQ:OGI) announced the expansion of its international portfolio with the launch of Edison and BOXHOT medical cannabis vape and pastille SKUs in Australia. The company already supplies indoor-grown flower through established B2B relationships in the region. The addition of 10 new SKUs under Edison and BOXHOT reflects a broadened product mix and deeper penetration into the Australian medical market.
Founded in 2013 and headquartered in Moncton, New Brunswick, Organigram Global Inc. (NASDAQ:OGI) is a Canadian licensed producer focused on innovation, branded cannabis products, and international expansion. With 7 hedge funds having stakes in the company as of Q3 2025, as recorded by Insider Monkey, Organigram Global is among the best pot stocks to buy according to hedge funds.
