Below we count down the 5 Best Cannabis Stocks To Buy Now. For our methodology and a more comprehensive list, please see the 10 Best Cannabis Stocks To Buy Now.
5. Innovative Industrial Properties, Inc. (NYSE:IIPR)
Number of Hedge Fund Shareholders: 12
Innovative Industrial Properties, Inc. (NYSE:IIPR) ranks fifth on the list of the best cannabis stocks to buy now, though hedge fund ownership of the stock has been cut in half since the end of 2020. Stuart J. Zimmer’s Zimmer Partners added to its already large IIPR stake during Q3, bolstering it by 26% to 1.95 million shares. Its 13F portfolio has 3.74% exposure to the stock.
Innovative Industrial Properties, Inc. (NYSE:IIPR) is one of the more unique cannabis stocks on the market, as the company does not grow, distribute, or sell cannabis. Instead, the REIT leases cultivation and industrial facilities to other players in the field, including Trulieve, Green Thumb Industries, and Curaleaf.
Innovative Industrial Properties, Inc. (NYSE:IIPR)’s revenue grew by 32% year-over-year in Q3, while its funds from operations rose by 34%. Despite the company’s strong results, its shares have fallen alongside the broader cannabis industry, being down by 55% this year. That’s elevated the company’s dividend yield to 6.42%, making the REIT an intriguing portfolio addition on several fronts.
4. Canopy Growth Corporation (NYSE:CGC)
Number of Hedge Fund Shareholders: 13
Canopy Growth Corporation (NYSE:CGC) is yet another cannabis stock whose shares have crashed in recent years, falling by 90% since early February 2021. Hedge funds have moderately increased their bets on the stock since then in the hopes of buying low into a future rally. In Q3, Stephen Mildenhall’s Contrarius Investment Management was one of those funds, adding a stake of 19.7 million CGC shares to its 13F portfolio.
Canopy Growth Corporation (NYSE:CGC) shares rallied in the fourth quarter of 2020 and January 2021, gaining over 200% during the four-month period following the launch of the company’s U.S. website. Those days are like a distant memory now, as shares have cratered by 93% since, owing heavily to weak demand in Canada, which among other things, forced the company to write down $87 million of cannabis inventory during Q3 2021.
Like fellow Canadian grower Aurora Cannabis, Canopy Growth Corporation (NYSE:CGC) has been focused on cost-cutting initiatives in recent quarters. The company’s adjusted core loss in Q3 was CAD78.1 million ($56.9 million), less than half what it lost a year earlier. The company’s BioSteel line of non-cannabis sports drinks has helped offset the weakness in the Canadian cannabis market, while the company continues to prep for its entry into the more promising U.S. market.
3. WM Technology, Inc. (NASDAQ:MAPS)
Number of Hedge Fund Shareholders: 15
WM Technology, Inc. (NASDAQ:MAPS) was very near the top of the list of most popular cannabis stocks among hedge funds upon its Q2 2021 IPO, but has steadily lost hedge fund support since then as its shares have suffered the same fate as nearly every other cannabis stock, crumbling by 95% since February 2021.
WM Technology, Inc. (NASDAQ:MAPS), which provides software platforms for companies in the cannabis industry, has been growing its customer count at a steady rate, but saw its average revenue per client take a big hit during Q3. Its customer count rose to 5,576 in the third quarter from 4,444 a year earlier, but revenue per client fell by 20% year-over-year to $3,019.
All told, WM Technology, Inc. (NASDAQ:MAPS) suffered a slight revenue decline in Q3 despite having more than a thousand additional customers, and its profitability metrics also took a step back during the quarter. MAPS shares have crashed by 84% since April 2 to trade at just 0.42x sales and 0.91x book value, which looks dirt cheap for a company with a clean balance sheet and ample growth opportunities ahead of it.
2. Tilray, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Shareholders: 16
Hedge fund ownership of Tilray, Inc. (NASDAQ:TLRY) took a major leap in the fourth quarter of 2020 and has largely maintained those levels since, even as TLRY shares have fallen by 49% since the end of 2020. D E Shaw massively increased its stake in Tilray during Q3, ending the quarter with just under 3.4 million shares.
Tilray, Inc. (NASDAQ:TLRY) shares have lost 53% of their value this year, including a 26% dive since December 5 after proposed marijuana banking reform laws that were expected to be passed alongside an important defense bill were instead blocked from being attached to the bill. Those reforms would allow Canadian cannabis companies like Tilray to operate in U.S. states where cannabis has been legalized, which they’re currently unable to do.
Tilray, Inc. (NASDAQ:TLRY) has been on an acquisition spree of late as it readies to make a big move on the American cannabis market. The company has acquired several American craft beer makers and already has businesses up and running in the U.S. market that sell alcohol and hemp products. That will give it a big advantage over other Canadian companies looking to break into the American market, as it already has the infrastructure in place to begin selling cannabis to Americans as soon as it’s legally able to do so.
1. The Scotts Miracle-Gro Company (NYSE:SMG)
Number of Hedge Fund Shareholders: 29
Topping the list of best cannabis stocks to buy now is The Scotts Miracle-Gro Company (NYSE:SMG). While not a cannabis pure play, it does have far more exposure to the industry than some of the other stocks that could’ve been considered for this list, including several major pharmaceutical companies that are dabbling in cannabis-based treatments, and brewers that are busily concocting cannabis-infused alcoholic beverages.
Hedge fund ownership of The Scotts Miracle-Gro Company (NYSE:SMG) hit a five-year low in the first quarter of this year, but has shot up by 50% over the past two quarters. Jack Woodruff’s Candlestick Capital Management added a stake of 500,000 SMG shares to its 13F portfolio during Q3, while First Eagle Investment Management maintained the largest position in the stock for the fourth straight quarter, owning nearly 1.58 million shares.
The Scotts Miracle-Gro Company (NYSE:SMG), which is best known for its lawn care products, has been steadily building a formidable cannabis products business under the Hawthorne label since 2014, which sells everything from indoor gardening products, to lights and nutrients. Hawthorne accounted for 30% of Scotts’ sales in 2021, up from 20% just two years earlier. The company would like to eventually sell its own cannabis directly to consumers if federal legalization becomes a reality.
For more of the latest stock picks worth considering for your portfolio, check out 15 Best Cybersecurity Stocks To Buy and 13 Best Bear Market Stocks To Buy.
Disclosure: None.
