12 Best Marijuana Stocks To Invest In

In this article, we discuss 12 best marijuana stocks to invest in.

In 2024, the global cannabis market is poised for substantial growth due to emerging legal markets, innovative products, and technological advancements. The US cannabis market is expected to significantly expand, with projected retail sales reaching $53.5 billion by 2027, driven by the growth in adult-use cannabis. States like New York are contributing to this growth by finalizing details for approved cannabis programs. The trend towards personalized cannabis products is expected to rise as consumers become more educated, leading companies to tailor products to individual needs. While pre-rolls are projected to remain popular, there is a growing expectation that consumers will increasingly favor craft cannabis products and artisanal flower, despite the enduring demand for low-cost and convenient options.

In 2024, the National Cannabis Industry Association predicts the legalization of recreational cannabis in several additional states, but federal legalization remains uncertain, evidenced by the challenges facing the SAFER Banking Act in Congress. The SAFE Banking Act continues to be a significant issue, with potential developments expected in 2024. Potential actions by President Biden may reshape the industry’s regulatory framework, impacting financial reporting and taxation. States such as Maryland, and potentially Pennsylvania and Ohio, could influence regional market dynamics and tax structures. In  November 2023, CNBC quoted Jaret Seiberg, a policy analyst at TD Cowen, who commented: 

“Legalization of cannabis is inevitable. It’s just a question of how bumpy the next several years are going to be.”

Marijuana-related ETFs experienced a significant surge in September 2023, as investors re-entered the sector following months of declining interest. This upswing was notably substantial, attributed to the U.S. Department of Health and Human Services’ recommendation to ease restrictions on marijuana after a review of its classification under the Controlled Substances Act. The industry, previously constrained by slow federal reform, faced slow growth and losses in recent quarters. Despite marijuana legalization in 39 states, challenges persist due to the Schedule I classification and federal prohibition, limiting access to financing and broader market opportunities. Following the HHS recommendation, Canaccord Genuity analyst Matt Bottomley commented: 

“This is effectively a continuation of what’s the most material element in how these stocks trade, which are federal catalysts. Velocity is so much higher on these federal headlines.”

On December 26, Boris Jordan, Executive Chairman of CuraLeaf, participated in CNBC’s ‘Fast Money’ to discuss the outlook for the cannabis sector in 2024. Jordan stated that ‘anything will be better than 2023, it was a terrible year’. He listed drivers that impacted the cannabis industry in 2023, including slower growth, higher cost of capital, and regulatory impediments. He said that the regulatory framework is better for 2024, with New York getting on board with adult-use cannabis programs. Florida is also expected to approve adult-use cannabis next year, according to Jordan. In 2024, Jordan observed that the industry’s direction depends on the US Federal Government, whether it moves cannabis from the Schedule 1 to Schedule 3 list, which would free up substantial cash in the sector. He added that currently, the marijuana businesses pay around 70% tax rate, which would then drop to a normal tax rate if the substance is categorized as Schedule 3. This would create a positive business dynamic in the industry and result in growth. 

Some of the best marijuana stocks to invest in include The Scotts Miracle-Gro Company (NYSE:SMG), Tilray Brands, Inc. (NASDAQ:TLRY), and Innovative Industrial Properties, Inc. (NYSE:IIPR). 

Our Methodology 

We chose the top marijuana stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). 

Best Marijuana Stocks To Invest In

12. Organigram Holdings Inc. (NASDAQ:OGI)

Number of Hedge Fund Holders: 3

Organigram Holdings Inc. (NASDAQ:OGI) is focused on the production and sale of cannabis and cannabis-derived products in Canada. Their product offerings include medical cannabis products such as whole flower, milled flower, pre-rolls, vapes, gummies, and concentrates for medical retailers, as well as adult-use recreational cannabis. Organigram Holdings Inc. reported its revenue for the first fiscal quarter of 2024, which came in at C$36.5 million. As of December 31, 2023, the company had a total cash position of C$54.6 million, consisting of C$41.8 million in unrestricted cash and C$12.8 million in restricted cash.

According to Insider Monkey’s fourth quarter database, 3 hedge funds were bullish on Organigram Holdings Inc., compared to 4 funds in the prior quarter. D E Shaw is the largest stakeholder of the company, with 146,500 shares worth $190,116. 

Like The Scotts Miracle-Gro Company, Tilray Brands, Inc., and Innovative Industrial Properties, Inc., Organigram Holdings Inc. is one of the best marijuana stocks to invest in. 

11. Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)

Number of Hedge Fund Holders: 5

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) ranks 11th on our list of the best marijuana stocks. The company is involved in the manufacturing and distribution of controlled environment agriculture equipment and supplies in the United States and Canada. Their product range includes agricultural lighting devices, indoor climate control equipment, nutrients, and plant additives for growing cannabis, flowers, fruits, vegetables, grains, and herbs in controlled environments. Hydrofarm Holdings Group, Inc.’s Q3 2023 Q3 GAAP EPS came in at -$0.44 and its revenue was $54.2 million. Net sales for full-year 2023 were expected to range between $230 million and $240 million.

According to Insider Monkey’s fourth quarter database, 5 hedge funds were bullish on Hydrofarm Holdings Group, Inc., compared to 6 funds in the earlier quarter. Michael Zimmerman’s Prentice Capital Management is the largest stakeholder of the company, with 464,108 shares worth $425,819. 

Here is what Baron Discovery Fund has to say about Hydrofarm Holdings Group, Inc. in its Q4 2021 investor letter:

“Our top 10 holdings represented 25.6% of the Fund’s net assets at the end of the fourth quarter. This is in line with historical weightings. Cash at the end of the quarter was 3.4%, which is in line with our low to mid-single digit targeted levels. We exited our position in Hydrofarm Holdings Group, Inc. as we felt the macro headwinds the company was facing in its end-markets were both challenging and worsening.”

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

Number of Hedge Fund Holders: 6

Village Farms International, Inc. (NASDAQ:VFF) specializes in the production, marketing, and sale of greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. The company operates through four segments – Produce, Cannabis-Canada, Cannabis-U.S., and Energy. Village Farms International, Inc. also produces and supplies cannabis products to licensed providers and provincial governments worldwide. It is one of the best marijuana stocks to watch. 

On January 31, Village Farms International, Inc. announced that it is building its first indoor cannabis production facility in the Netherlands through its subsidiary, Leli Holland. The company, holding a license for legal recreational cannabis production in the Netherlands, aims to start production in Q4 2024. Leli Holland plans to sell different cannabis products, and the construction will be funded using Village Farms’ existing cash reserves.

According to Insider Monkey’s fourth quarter database, 6 hedge funds were bullish on Village Farms International, Inc., compared to 4 funds in the last quarter. Israel Englander’s Millennium Management is a prominent stakeholder of the company, with 124,673 shares worth $95 million. 

9. Aurora Cannabis Inc. (NASDAQ:ACB)

Number of Hedge Fund Holders: 6

Aurora Cannabis Inc. (NASDAQ:ACB) is involved in the production, distribution, and sale of cannabis and cannabis-derived products globally. The company operates through three segments – Canadian Cannabis, European Cannabis, and Plant Propagation. On February 9, Canaccord Genuity upgraded its rating on Aurora Cannabis Inc. to Buy, citing a favorable valuation. Despite the expected performance in Q3 and a 25% decrease in Aurora Cannabis Inc. shares since Q2 2023, the analysts noted moderate progress towards sustainable profitability as a factor in the upgrade. Aurora Cannabis Inc. is one of the best marijuana stocks to monitor. 

According to Insider Monkey’s fourth quarter database, 6 hedge funds were bullish on Aurora Cannabis Inc., compared to 7 funds in the prior quarter. Israel Englander’s Millennium Management is a prominent stakeholder of the company, with 31,654 shares valued at $154,466. 

8. Cronos Group Inc. (NASDAQ:CRON)

Number of Hedge Fund Holders: 7

Cronos Group Inc. (NASDAQ:CRON) is a cannabinoid company based in Toronto, Canada. Cronos Group Inc. is engaged in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for both medical and adult-use markets. It is one of the best marijuana stocks to invest in. On November 8, 2023, Cronos Group Inc. reported a Q3 GAAP EPS of $0.00 and a revenue of $24.81 million, exceeding Wall Street estimates by $0.03 and $5.24 million, respectively. Revenue for the third quarter increased 21.6% on a year-over-year basis. 

According to Insider Monkey’s fourth quarter database, 7 hedge funds were bullish on Cronos Group Inc., compared to 8 funds in the prior quarter. Traci Lerner’s Chescapmanager LLC is the leading stakeholder of the company, with 8.3 million shares worth $17.40 million. 

7. GrowGeneration Corp. (NASDAQ:GRWG)

Number of Hedge Fund Holders: 8

GrowGeneration Corp. (NASDAQ:GRWG) owns and operates retail hydroponic and organic gardening stores across the United States. The company specializes in the marketing and distribution of products for hydroponic gardening, including nutrients, growing media, lighting, environmental control systems, vertical benching, and accessories. GrowGeneration Corp. is one of the best marijuana stocks to buy. 

On January 8, GrowGeneration Corp. announced that it anticipates full-year 2023 revenue to reach the upper limit of the previously provided guidance range of $220 million to $225 million. The adjusted EBITDA guidance for FY23 remains unaltered, with a projected loss between $4 million to $6 million.

According to Insider Monkey’s fourth quarter database, 8 hedge funds were bullish on GrowGeneration Corp., compared to 7 funds in the last quarter. D E Shaw is the leading stakeholder of the company, with 772,855 shares valued at approximately $2 million. 

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

Number of Hedge Fund Holders: 11

WM Technology, Inc. (NASDAQ:MAPS) offers e-commerce and compliance software solutions to retailers and brands in the cannabis market, operating in the United States and internationally. Their Weedmaps marketplace enables cannabis users to search for and browse products, reserve items from local retailers, and provides educational information. On November 8, 2023, WM Technology, Inc. reported a Q3 GAAP EPS of -$0.02, in-line with market consensus. Revenue for the quarter came in at $47.73 million, outperforming Wall Street estimates by $0.39 million. 

According to Insider Monkey’s fourth quarter database, 11 hedge funds were long WM Technology, Inc., compared to 9 funds in the last quarter. Falcon Edge Capital is the largest stakeholder of the company, with 2.12 million shares worth $1.5 million. 

In addition to The Scotts Miracle-Gro Company, Tilray Brands, Inc., and Innovative Industrial Properties, Inc., WM Technology, Inc. is one of the best marijuana stocks to consider. It ranks 6th on our list. 

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

Number of Hedge Fund Holders: 11

Innovative Industrial Properties, Inc. is a self-advised Maryland REIT that concentrates on acquiring, owning, and managing specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. is one of the best marijuana stocks to buy. On December 15, 2023, the company declared a $1.82 per share quarterly dividend, a 1.1% increase from its prior dividend of $1.80. The dividend was distributed to shareholders on January 12. 

According to Insider Monkey’s fourth quarter database, 11 hedge funds were bullish on Innovative Industrial Properties, Inc., compared to 16 funds in the prior quarter. Stuart J. Zimmer’s Zimmer Partners is the largest stakeholder of the company, with 950,628 shares worth $95.8 million. 

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

Number of Hedge Fund Holders: 13

Tilray Brands, Inc. operates through four segments – Cannabis Business, Distribution Business, Beverage Alcohol Business, and Wellness Business. It offers medical and adult-use cannabis products, pharmaceutical and wellness products, beverage alcohol products, hemp-based food, and hemp wellness products. Tilray Brands, Inc. is one of the best marijuana stocks to invest in. On February 22, Tilray introduced two new ready-to-drink cold brew tea beverages under its premium cannabis wellness brand, Solei.

According to Insider Monkey’s fourth quarter database, 13 hedge funds were long Tilray Brands, Inc., compared to 17 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is a prominent stakeholder of the company, with 2.3 million shares worth $5.4 million. 

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

Number of Hedge Fund Holders: 30

The Scotts Miracle-Gro Company manufactures and sells lawn, garden care, and indoor/hydroponic gardening products globally. It operates through three segments – U.S. Consumer, Hawthorne, and Other. The company offers a range of lawn care and gardening products, including fertilizers, seeds, plant foods, pest control, and hydroponic equipment. The Scotts Miracle-Gro Company is one of the best marijuana stocks to invest in. On January 22, the company declared a quarterly dividend of $0.66 per share, in line with previous. The dividend is payable on March 8, to shareholders on record as of February 23. 

According to Insider Monkey’s fourth quarter database, 30 hedge funds were bullish on The Scotts Miracle-Gro Company, compared to 17 funds in the prior quarter. Schonfeld Strategic Advisors is the leading stakeholder of the company, with 444,336 shares worth $28.3 million. 

Madison Funds made the following comment about The Scotts Miracle-Gro Company 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 – 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.”

2. Bausch Health Companies Inc. (NYSE:BHC)

Number of Hedge Fund Holders: 31

Bausch Health Companies Inc. (NYSE:BHC) is a pharmaceutical company that develops, manufactures, and markets products in various medical fields, including gastroenterology, hepatology, neurology, dermatology, international pharmaceuticals, and eye health. Bausch Health Companies Inc. is also involved in the medical marijuana market. Bausch’s Q4 2023 revenue rose 9.5% year-over-year to $2.41 billion, beating Wall Street estimates by $120 million. 

According to Insider Monkey’s fourth quarter database, 31 hedge funds were bullish on Bausch Health Companies Inc., same as the prior quarter. GoldenTree Asset Management is the largest stakeholder of the company, with 27.6 million shares worth $221.7 million. 

Here is what Miller Value Partners Opportunity Trust Fund has to say about Bausch Health Companies Inc. in its Q2 2022 investor letter:

“Bausch Health Companies Inc. declined during the quarter as the company consummated its Bausch+Lomb IPO at valuations far below expectations, reported disappointing Q1 2022 results, and delayed its plan to spin out its Solta (aesthetics) business due to difficult market conditions. While the company spun off 10% of Bausch+Lomb (BCLO) they retained 90% of the company which they intend to distribute once they have met their target leverage ratio of 6.5-6.7x. The future spin-off value of the Bausch+Lomb piece represents a value of $12.55 per share, 39% above where Bausch Health is currently trading. The company recently appointed John Paulsen as Chair of the Board, which should accelerate value realization.”

1. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)

Number of Hedge Fund Holders: 42

Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is a biopharmaceutical company that focuses on identifying, developing, and commercializing pharmaceutical products to address medical needs in neuroscience and oncology. Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is also involved in medical marijuana. On November 8, the company announced a Q3 non-GAAP EPS of $4.84, falling short of market estimates by $0.09. Revenue for the third quarter came in at $972.14 million, beating Wall Street consensus by $2.8 million. 

According to Insider Monkey’s fourth quarter database, 42 hedge funds were long Jazz Pharmaceuticals plc (NASDAQ:JAZZ), compared to 40 funds in the prior quarter. Bernard Horn’s Polaris Capital Management is the largest stakeholder of the company, with 1.26 million shares worth nearly $156 million. 

Aristotle Capital Global Equity Strategy made the following comment about Jazz Pharmaceuticals plc (NASDAQ:JAZZ) in its Q3 2023 investor letter:

“During the quarter, we sold our position in Magna International and invested in a new position, Jazz Pharmaceuticals plc (NASDAQ:JAZZ). Founded in 2003, Jazz Pharmaceuticals is a global biopharmaceutical company headquartered in Ireland. The drugmaker’s portfolio of nine approved products focuses on conditions with limited therapeutic treatments in neuroscience (~75% of 2022 revenue) and oncology (~25%).

Jazz’s drug Xyrem was added to its portfolio in 2005 and was approved for use in patients with narcolepsy. The drug’s strong efficacy propelled it to be the standard of care for this incurable sleep condition and has achieved wide adoption for the treatment of excessive daytime sleepiness and cataplexy (episodes of loss of muscle control)…

Xyrem’s patent exclusivity ended in January 2023, and authorized generic versions of the product have entered the market. To prepare for the patent cliff, the company developed Xywav, a lower‐sodium version of Xyrem, which is touted for its potentially better heart safety. The drug has received FDA approval for the treatment of narcolepsy and idiopathic hypersomnia and has orphan drug exclusivity through 2027…” (Click here to read the full text)

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This article is originally published at Insider Monkey.