In this article, we will discuss the 7 Most Undervalued Pot Stocks To Buy According To Analysts.
The global cannabis market was worth $26.86 billion in 2022, Spherical Insights & Consulting data shows. Three years later, Mordor Intelligence valued the market at $44.60 billion. The research firm expects the market to nearly triple in the next five years, projecting it to grow to $102.10 billion by 2030.
As that happens, cannabis stocks have experienced significant volatility, with many major companies down 65% or more over the past three years. This volatility, according to NewLake Capital Partners CEO Anthony Coniglio, is likely to define the cannabis sector in 2025. “Trading volumes will continue to be driven by the news cycle, with investors quick to take profits on any upward price movement, fueling repeated cycles of rallies and pullbacks,” he said.
Other analysts maintain optimistic outlooks for select cannabis companies. Sonny Randhawa of Seaport Global Securities initiated coverage on several cannabis stocks as he believes a substitute scenario could unfold. He assigned Buy ratings to three major stocks, noting that “With budgets constrained, we believe new customer penetration rates could accelerate as consumers spend more time at home and the bang-per-buck for cannabis vs alcohol keeps moving higher.”
Jordan Tritt, CEO of BDSA, a cannabis market intelligence firm, believes that primary growth in the cannabis sector over the next five years will come from new adult-use markets coming online. As such, he advises investors to put their money in “established companies that have the resources to capture this growth.”
Another possible catalyst for cannabis market growth is the regulatory landscape. For instance, industry observers suggest rescheduling cannabis from Schedule I to Schedule III could neutralize IRS Rule 280E, which currently prohibits the deduction of operating expenses, potentially adding tens of millions to cannabis company cash flows.
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Our Methodology
To create a list of the 7 most undervalued pot stocks to buy, according to analysts, we reviewed various cannabis ETFs to identify companies involved in the cannabis industry. We then scanned for stocks that analysts believe are undervalued, with a forward price-to-earnings multiple of less than 20, and well-positioned to generate significant long-term value. Finally, we ranked the stocks in ascending order based on the stock’s upside potential as of July 9, 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Most Undervalued Pot Stocks To Buy According To Analysts
7. Chicago Atlantic BDC, Inc. (NASDAQ:LIEN)
Stock Upside Potential as of July 9: 2.42%
Forward Price to Earnings Ratio (P/E) as of July 9: 7.41
Number of Hedge Fund Holders as of Q1 2025: N/A
Chicago Atlantic BDC, Inc. (NASDAQ:LIEN) is one of the 7 most undervalued pot stocks to buy according to analysts. On July 1, the company announced changes to its executive team, appointing an interim Chief Financial Officer (CFO) and a new Chief Accounting Officer (CAO). The move was necessitated by Martin Rodgers’ resignation from the CFO position.
Rodgers exited the CFO position on July 1, after which the company stated that “Mr. Rodgers’ decision to resign from his position as Chief Financial Officer of the Company was not due to a disagreement on any matter related to the Company’s operations, policies or practices.” In his stead, Thomas Geoffroy will serve as the interim CFO. The appointment took effect immediately.
Mr. Geoffroy has over 20 years of experience in accounting and finance. He has expertise in financial reporting, operations, and internal controls within the financial services industry. His background includes serving as CFO of a NASDAQ-listed mortgage REIT, a publicly traded credit-focused asset management firm, and a family office. He also held roles as Finance and Operations Principal (CFO), General Securities Principal, and Chief Compliance Officer at United Capital Markets, as well as Controller at Ares Management.
Chicago Atlantic BDC’s Board also appointed Gianni Fazio as the new CAO. Mr. Fazio is a licensed Certified Public Accountant with over five years of experience in finance and accounting. He joined the company in 2023 after previously serving as a Venture Associate at Adit Ventures.
Chicago Atlantic BDC, Inc. (NASDAQ:LIEN) invests across the cannabis ecosystem. It provides direct loans and equity financing to privately held cannabis companies and related businesses. Its investment objective enables companies in niche and underserved sectors to gain access to much-needed capital.
6. Quest Diagnostics Incorporated (NYSE:DGX)
Stock Upside Potential: 8.79%
Forward Price to Earnings Ratio (P/E): 17.89
Number of Hedge Fund Holders as of Q1 2025: 46
Quest Diagnostics Incorporated (NYSE:DGX) is one of the 7 most undervalued pot stocks to buy according to analysts. On June 10, the company said it is developing a Multi-Cancer Stratification (MCaST) blood test in collaboration with The University of Texas MD Anderson Cancer Center. This initiative aims to improve the assessment of elevated cancer risk in individuals.
The announcement detailed that the MCaST blood test will identify individuals at an elevated risk for various cancers. Afterwards, the individuals will be encouraged to pursue appropriate preventive screenings or other medical evaluations that could lead to earlier detection. The test is designed to identify the risk of developing several cancers, including “colorectal, lung, breast, pancreatic, ovarian, liver, prostate, esophageal, and stomach cancers.”
Quest Diagnostics stated that MCaST, on which the blood test is based, is a “cohesive risk model” developed by Dr. Samir Hanash’s laboratory at MD Anderson Cancer Center. This technology utilizes circulating protein biomarkers, which were identified through “extensive clinical research conducted on screening study cohorts involving tens of thousands of individuals.” The company plans to further refine, develop, and validate this technology for its own laboratory-developed test.
Quest Diagnostics Incorporated (NYSE:DGX) is a major provider of diagnostic testing services. It plays a significant role in the cannabis industry by providing drug testing services. It offers various drug testing methods, including urine, oral fluid (saliva), and hair testing, to detect marijuana use in both workplace and clinical settings.
