In this article, we will look at the 12 best hemp stocks to buy now.
The Global Marijuana Industry
According to an industry analysis report by Research and Markets, the global marijuana market size was estimated at $25.6 billion in 2021. The market is expected to grow at a compound annual growth rate of 24% and reach a valuation of $176 billion by 2030. As consumers become more aware of the potential health benefits of using marijuana to treat neurological diseases, the drug is expected to attain legal status in countries around the world.
According to Grand View Research, the global legal marijuana market was worth $13 billion in 2021 and is expected to reach a value of $101.9 billion by 2030, registering a CAGR of 25.5%. The driver for this growth is the increasing adoption and legalization of medical marijuana. As of 2022, 19 U.S. states and 2 U.S. territories have legalized the use of recreational marijuana and 37 U.S. states and 4 U.S. territories, including D.C., have legalized medical marijuana. While North America accounted for 80% of the share of the global legal marijuana market in 2021, South American countries, and European countries such as the United Kingdom, are also decriminalizing and legalizing marijuana in regulated quantities and for specific uses.
The marijuana industry is an emerging and secular growth industry, driven by favorable legislation and increasing adoption of the medicinal use of marijuana around the world. Companies operating in the space are expected to experience strong secular growth and can become fruitful long-term investments. Industry-leading companies like Altria Group, Inc. (NYSE:MO), Philip Morris International Inc. (NYSE:PM), and Constellation Brands, Inc. (NYSE:STZ) are dipping their toes in the lucrative marijuana market and exploring investment opportunities. However, in this article, we will specifically discuss pure-play hemp stocks.
Our Methodology
We reviewed the marijuana industry and identified the key players. We narrowed down our selection to companies that have solid product pipelines and positive market sentiment. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, top shareholders, and business models. The hedge fund sentiment was derived from Insider Monkey’s database of roughly 900 elite hedge funds.
Best Hemp Stocks To Buy Now
12. Ayr Wellness Inc. (OTC:AYRWF)
Number of Hedge Fund Holders: N/A
Ayr Wellness Inc. (OTC:AYRWF) is a leading multi-state operator of cannabis and is involved in the manufacture and retail of cannabis products and cannabis packaged goods. The company offers cannabis concentrates, edibles, and vaporizers, among other cannabis-based products. On September 22, Ayr Wellness Inc. launched its leading cannabis brand, Lost in Translation, in four U.S. states: Arizona, Florida, New Jersey, and Pennsylvania.
This August, Northland analyst Greg Gibas revised his price target on Ayr Wellness Inc. to $10 from $14 and reiterated a buy-side Outperform rating on the shares. On August 19, Canaccord analyst Matt Bottomley adjusted his price target on Ayr Wellness Inc. to C$30 from C$40 and maintained a Buy rating on the shares.
Ayr Wellness Inc. has a consensus Strong Buy rating from Wall Street analysts. Over the past three months, the stock has received 5 Buy ratings and 1 Hold rating and has an average price target of $12, which implies a 409% upside from current levels. As of June 30, Ancora Advisors owns 7,300 shares of Ayr Wellness Inc. which amounts to a stake of $35,000.
Some of the top large-cap stocks that have exposure to the marijuana market include Altria Group, Inc., Philip Morris International Inc., and Constellation Brands, Inc..
11. Trulieve Cannabis Corp. (OTC:TCNNF)
Number of Hedge Fund Holders: N/A
Trulieve Cannabis Corp. (OTC:TCNNF) is a leading American producer and cultivator of medical and recreational cannabis. Trulieve Cannabis Corp. is one of the best marijuana stocks to buy now and has a consensus Strong Buy rating from Wall Street analysts. Over the past three months, 10 Wall Street analysts have given the stock Buy ratings. The stock has an average price target of $31 which represents an upside of 267% from current levels.
On August 10, Trulieve Cannabis Corp. announced earnings for the second quarter of fiscal 2022. The company reported sales of $320 million, up 49% year over year. Shortly after its earnings release, Stifel analyst Andrew Partheniou revised his price target on Trulieve Cannabis Corp. to C$36.50 from C$40 and reiterated a Buy rating on the shares. This August, Canaccord analyst Derek Dley adjusted his price target on Trulieve Cannabis Corp. to C$57 from C$65 and maintained a Buy rating on the shares.
As of June 30, Tamarack Capital Management is the top shareholder in Trulieve Cannabis Corp. and owns 7,500 shares of the company which amounts to a stake of $86,000.
10. Jushi Holdings Inc. (OTC:JUSHF)
Number of Hedge Fund Holders: N/A
Jushi Holdings Inc. (OTC:JUSHF) is a vertically integrated cannabis company that is involved in the cultivation, processing, retail, and distribution of medical and recreational cannabis and cannabis derivatives. On August 29, Jushi Holdings Inc. announced market-beating earnings for the fiscal second quarter of 2022. The company reported earnings per share of $0.06 and outperformed estimates by $0.14. The company generated a revenue of $72.76 million, up 52.5% year over year, and beat Wall Street consensus by $3.16 million.
On July 22, Seaport Global analyst Sonny Randhawa started coverage of Jushi Holdings Inc. with a Buy rating and a $3 price target. On August 30, Canaccord analyst Bobby Burleson revised his price target on Jushi Holdings Inc. to $2.75 from $4.50 and maintained a Buy rating on the shares.
Over the past three months, Jushi Holdings Inc. has received 3 Buy ratings and 1 Hold rating from Wall Street analysts and has a consensus Strong Buy rating. The stock has an average price target of $2.8 which represents an upside of 128.6%. Wall Street sees upside to Jushi Holdings Inc. and the stock is one of the best marijuana stocks to buy now.
9. Verano Holdings Corp. (OTC:VRNOF)
Number of Hedge Fund Holders: N/A
Verano Holdings Corp. (OTC:VRNOF) is an American multi-state cannabis operator that is involved in the cultivation, processing, and retail of cannabis across the United States. The company’s flagship brands include Encore, MUV, and Verano. On August 19, Verano Holdings Corp. announced the opening of Zen Leaf Clarksburg, its fourth dispensary in West Virginia and 111th in the United States.
Verano Holdings Corp. is a profitable cannabis company and also has free cash flows to fund its operations, therefore it is among the best marijuana stocks to buy now. As of September 30, the stock has a trailing twelve-month operating margin of 16.14% and free cash flows of $1.6 million.
On September 8, PI Financial analyst Jason Zandberg started coverage of Verano Holdings Corp with a Buy rating and a C$22 price target. Over the past three months, the stock has received 2 Buy ratings and 1 Hold rating from Wall Street analysts and has an average price target of $11.28, which implies a 142.5% upside from current levels.
As of June 30, Westerly Capital Management owns 165,000 shares of Verano Holdings Corp. which amounts to a stake of $0.93 million The investment covers 0.76% of Westerly Capital Management’s 13F portfolio.
8. Green Thumb Industries Inc. (OTC:GTBIF)
Number of Hedge Fund Holders: N/A
Green Thumb Industries Inc. (OTC:GTBIF) is an American cannabis retailer that manufactures and distributes cannabis products for medical and recreational use. Among the company’s products, we have cannabis flowers, pre-rolls, concentrates, edibles, and topicals among several other cannabis-based products. The company’s primary brands include Dogwalkers, Doctor Solomon’s, and Good Green.
Green Thumb Industries Inc. is a low-risk and profitable cannabis company to own and one of the best marijuana stocks to invest in now. According to the company’s balance sheet, as of June 30, Green Thumb Industries Inc. has a debt-to-equity ratio of 0.15. As of September 30, the company has a trailing twelve-month operating margin of 24.23%.
This August, Canaccord analyst Matt Bottomley revised his price target on Green Thumb Industries Inc. to C$35 from C$40 and reiterated a Buy rating on the shares. Over the past three months, the stock has received 11 Buy ratings from Wall Street analysts and has a consensus Strong Buy rating. The stock’s average price target sits at $23, which represents an upside of 147.5% from current share levels.
As of June 30, Zevenbergen Capital Investments has stakes worth $0.85 million in Green Thumb Industries Inc. and is the most prominent investor in the company.
7. Curaleaf Holdings Inc. (OTC:CURLF)
Number of Hedge Fund Holders: N/A
Curaleaf Holdings Inc. (OTC:CURLF) is a leading North American cannabis company that operates medical and recreational marijuana dispensaries in over 20 U.S. states. The company’s two primary brands are Curaleaf and Select. On September 19, Curaleaf Holdings Inc. announced that it has successfully acquired a majority stake in Four 20 Pharma, a licensed EU-GMP & GDP German producer and distributor of medical cannabis. Curaleaf Holdings Inc. now owns a 55% stake in Four 20 Pharma.
Wall Street analysts are bullish on Curaleaf Holdings Inc.. This August, Alliance Global Partners analyst Aaron Grey revised his price target on Curaleaf Holdings Inc. to C$12 from C$15 and maintained a Buy rating on the shares. On August 9, Canaccord analyst Matt Bottomley revised his price target on Curaleaf Holdings Inc. to C$13.50 from C$14.50 and reiterated a Buy rating on the shares. Curaleaf Holdings Inc. has a consensus Strong Buy rating from Wall Street analysts. Over the past three months, the stock has received 9 Buy ratings and 1 Hold rating and has a median price target of $9, which implies an upside of 82.5%.
Curaleaf Holdings Inc. has low debt and is also showing the ability to maintain profitability. As of September 30, the stock has a trailing twelve-month operating margin of 11.83% and as of June 30, the company has a debt-to-equity ratio of 0.34. Curaleaf Holdings Inc. is among the best marijuana stocks to buy now.
6. Cresco Labs Inc. (OTC:CRLBF)
No. of Hedge Fund Holders: N/A
Cresco Labs Inc. (OTC:CRLBF) cultivates, manufactures, and sells retail and medical cannabis products in the United States. On August 17, Cresco Labs Inc. announced earnings for the second quarter of fiscal 2022. The company reported a revenue of $218.2 million and outperformed Wall Street consensus by $68,000. As of June 30, the company has a debt-to-equity ratio of 0.60. The company has a trailing twelve-month operating margin of 14.67% and is therefore ranked high among the best marijuana stocks to buy now.
On August 18, Piper Sandler analyst Michael Lavery revised his price target on Cresco Labs Inc. to $6 from $9 and maintained a buy-side Overweight rating on the shares. This August, Canaccord analyst Derek Dley revised his price target on Cresco Labs Inc. to C$8 from C$9.50 and reiterated a Buy rating on the shares. Over the past three months, Cresco Labs Inc. has received 5 Buy ratings and 2 Hold ratings from Wall Street analysts. The stock has an average price target of $6.75 which represents an upside of 149%.
As of June 30, Ancora Advisors is the leading shareholder in Cresco Labs Inc. and owns more than 224,000 shares which amounts to a stake of $0.56 million.
For risk-averse investors that want to stick with owning established companies and mature businesses but also get some exposure to the marijuana industry, some of the top plays include Altria Group, Inc., Philip Morris International Inc., and Constellation Brands, Inc..
5. High Tide Inc. (NASDAQ:HITI)
Number of Hedge Fund Holders: 3
High Tide Inc. (NASDAQ:HITI) is a leading global retailer of cannabis and cannabis derivatives. The stock has caught the attention of hedge funds. At the end of the second quarter of 2022, 3 hedge funds held stakes in High Tide Inc. worth $107,000. This is compared to 1 hedge fund in the previous quarter with stakes worth $7,000. The hedge fund sentiment for the stock is positive.
On September 14, High Tide Inc. announced earnings for the third quarter of fiscal 2022 in which it beat EPS estimates by $0.04. The company reported a revenue of $72.4 million, up 91.1% year over year, and outperformed Wall Street consensus by $3.69 million.
High Tide Inc. is expanding its operations and is one of the best marijuana stocks to buy now. On September 29, High Tide Inc. announced that it has entered into an agreement with Jimmy’s Cannabis Shop by which it will acquire 100% of the chain’s 2 retail locations for $5.3 million.
Over the past three months, High Tide Inc. has received 2 Buy ratings and 1 Hold rating from Wall Street analysts and has an average price target of $5.35. The stock’s average price target represents an upside of 282% from current share levels.
As of June 30, Millennium Management is the leading shareholder in High Tide Inc. and has stakes worth $80,000 in the company.
4. SNDL Inc. (NASDAQ:SNDL)
Number of Hedge Fund Holders: 5
SNDL Inc. (NASDAQ:SNDL) is a pharmaceutical company involved in the production and distribution of cannabis products for both recreational and medical use. On August 10, SNDL Inc. announced earnings for the second quarter of fiscal 2022. The company reported a revenue of $175 million, up 2,295% year over year.
Shortly after the company’s earnings release, Canaccord analyst Shaan Mir upgraded SNDL Inc. to Speculative Buy from Hold and reiterated his price target of $5 on the stock. Over the past three months, the stock has received 2 Buy ratings and 1 Hold rating from Wall Street analysts and has an average price target of $5.5, which implies an upside of 153%.
SNDL Inc. is exploring strategic M&A, and is, therefore, one of the best marijuana stocks to buy now. On August 22, SNDL Inc. announced that it has entered into an agreement with a leading North American cannabis company, The Valens Company (NASDAQ:VLNS), to acquire all issued and outstanding common shares of The Valens Company for a transaction of C$138 million. The transaction is expected to close in January 2023.
At the end of Q2 2022, 5 hedge funds were long SNDL Inc. and held stakes worth $2.28 million in the company. As of June 30, D E Shaw owns more than 2.5 million shares of SNDL Inc. and is the most prominent investor in the company. The fund’s stakes are valued at $832,000.
3. Cronos Group, Inc. (NASDAQ:CRON)
Number of Hedge Fund Holders: 5
Cronos Group, Inc. (NASDAQ:CRON) is a diversified vertically-integrated cannabinoid company. The company is involved in the manufacturing and distribution of cannabis and cannabis derivatives. On August 9, Cronos Group, Inc. reported that its revenue for the second quarter of fiscal 2022 amounted to roughly $23 million, up 48% year over year.
This July, Canaccord analyst Matt Bottomley raised his price target on Cronos Group, Inc. to C$5 from C$4.50 and upgraded the stock to Buy from Hold. This September, Barclays analyst Gaurav Jain revised his price target on Cronos Group, Inc. to $3.50 from $5 and maintained an Equal Weight rating on the shares.
Cronos Group, Inc. has a consensus Buy rating and the stock is among the best marijuana stocks to buy now. Over the past three months, the stock has received 3 Buy ratings and 5 Hold ratings. The stock has an average price target of $4.45 which implies an upside of 57.8%.
At the close of Q2 2022, 5 hedge funds held stakes in Cronos Group, Inc.. The total value of these stakes amounted to $35.2 million. As of June 30, Chescapmanager LLC owns more than 8.3 million shares of Cronos Group, Inc. and is the largest shareholder in the company. The fund’s stakes are valued at $23.4 million.
2. Aurora Cannabis Inc. (NASDAQ:ACB)
Number of Hedge Fund Holders: 10
Aurora Cannabis Inc. (NASDAQ:ACB) is a leading global producer and distributor of cannabis and cannabis derivatives. At the end of Q2 2022, 10 hedge funds held stakes in Aurora Cannabis Inc.. The total value of these stakes amounted to $45.7 million, up from $40.8 million in the previous quarter with 9 positions. The hedge fund sentiment for the stock is positive.
Wall Street analysts are positive on Aurora Cannabis Inc. and the stock is among the best marijuana stocks to invest in now. On September 21, Piper Sandler analyst Michael Lavery revised his price target on Aurora Cannabis Inc. to $3 from $4 and maintained a Neutral rating on the shares. The analyst expects Aurora Cannabis Inc. to reach positive adjusted EBITDA by the third quarter of 2023. This September, Canaccord analyst Matt Bottomley revised his price target on Aurora Cannabis Inc. to C$2 from C$2.50 and upgraded the stock to Hold from Sell.
Over the past three months, Aurora Cannabis Inc. has received 1 Buy and 4 Hold ratings from Wall Street analysts. The stock has an average price target of $1.40 which implies a 14.75% upside from current levels.
As of June 30, Millennium Management owns more than 3.2 million shares of Aurora Cannabis Inc. and is the most prominent investor in the company. The fund’s stakes are valued at $4.32 million.
1. Innovative Industrial Properties, Inc. (NYSE:IIPR)
Number of Hedge Fund Holders: 16
Innovative Industrial Properties, Inc. (NYSE:IIPR) operates as a REIT that manages specialized properties for state-licensed cannabis operators. As of June 30, Zimmer Partners owns over 1.5 million shares of Innovative Industrial Properties, Inc. and is the largest shareholder in the company. The fund’s stakes are valued at $171 million and the investment covers 3.56% of Zimmer Partners’ 13F portfolio.
On September 19, Compass Point analyst Merrill Ross raised his price target on Innovative Industrial Properties, Inc. to $175 from $100 and upgraded the stock to Buy from Neutral. Over the past three months, the stock has received 6 Buy and 2 Hold ratings from Wall Street analysts and has a consensus rating of Strong Buy. The stock’s average price target sits at $162 which represents an upside of 83%.
Innovative Industrial Properties, Inc. is a fairly valued dividend-paying marijuana stock to buy now. As of September 30, the stock is trading at a PE multiple of 17x and is offering a forward dividend yield of 8.14%, which the company supports with free cash flows of over $221 million.
At the end of Q2 2022, 16 hedge funds were long Innovative Industrial Properties, Inc. and held stakes worth $291.6 million in the company. This is compared to 15 positions in the previous quarter with stakes worth $311 million.
You can also take a look at 10 Best Coffee Stocks To Buy and 10 Best Consumer Discretionary Stocks To Buy.
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This article is originally published at Insider Monkey.