What Pot Stocks To Buy
Unlike the U.S. and Canadian stocks on this list, Clever Leaves is a large global cannabis producer headquartered in Colombia with cultivation and extraction operations in Colombia, cultivation facilities in Portugal and a distribution network in Europe.
what pot stocks to buy
The stocks highlighted on this list are sourced from industry analysts, but they may not be a perfect fit for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
However, the first wave of U.S.-listed cannabis stocks has been something of a disappointment. Shares of high-growth, multi-state operators (MSOs) have slumped in 2023 as cannabis producers face pricing pressures in a fiercely competitive U.S. market.
Wayne Duggan is a Forbes Advisor contributor. He is also a staff writer at Benzinga, where he has reported on breaking financial market news and analyst commentary related to popular stocks since 2014. Mr. Duggan is also the author of the book "Beating Wall Street With Common Sense" and has contributed news and analysis to U.S. News & World Report, Seeking Alpha, InvestorPlace.com and The Motley Fool. Mr. Duggan is a graduate of the Massachusetts Institute of Technology and resides in Biloxi, Mississippi.
Marijuana stocks have given cannabis investors nothing but false starts over the past few years. Most recently, there were a plethora of issues facing the industry throughout 2022, including inflation, overproduction, lack of capital, job losses and cratering stock prices.
The long-term prognosis for the cannabis industry is good. Ultimately, the following nine picks look like the best marijuana stocks (and funds) to benefit from this ongoing growth and maturation.
Still, IIPR remains one the best REITs on Wall Street, as well as one of the best marijuana stocks, according to analysts. Piper Sandler analyst Alexander Goldfarb has an Overweight rating (the equivalent of Buy) on IIPR, with a $140 target price, some 55% higher than current levels.
Cresco is one of Wall Street's favorite marijuana stocks. Of the 19 analysts following the stock, 13 give it a Strong Buy, three say it's a Buy, and three have it at Hold. Plus, the average target price of $6.88 implies the stock will more than triple over the next 12 months or so.
Not forgetting that this is an article about the best marijuana stocks, British American Tobacco invested an additional $5.1 million last March in Canadian cannabis producer OrganiGram Holdings (OGI (opens in new tab)), bringing its stake in the company to 19.5%. The two continue to collaborate on new cannabis-related products.
By comparison, the MJ ETF follows the performance of the Prime Alternative Harvest Index, which in addition to tracking cannabis stocks, also includes cigarette manufacturers such as Altria (MO (opens in new tab)) and a 20.1% weighting in the ETFMG U.S. Alternative Harvest ETF (MJUS (opens in new tab)). As a result of the ETF weighting, the Canadian content in MJ is slightly less than 42%.
To say the cannabis industry and cannabis stocks have been a disappointment for investors thus far would be a huge understatement. With legalization sweeping across numerous U.S. states and all of Canada, the legal marijuana industry in North America was expected to be the next big thing.
The result is that most cannabis stocks are as much as 90%+ off their all-time highs. The Horizons Marijuana Life Sciences Index ETF, one of the benchmark trackers for the industry, is down by 86% from its September 2018 peak, and by 47% this year alone.
Tilray, Inc. (NASDAQ:TLRY), Canopy Growth Corporation (NYSE:CGC), and The Scotts Miracle-Gro Company (NYSE:SMG) are a few of the more well-known cannabis stocks to buy now. A lesser known player in the space is Canadian grower SNDL Inc. (NASDAQ:SNDL), or Sundial Growers, which has been busy of late buying up other Canadian cannabis assets.
Tobacco giant Altria Group, Inc. (NYSE:MO) and beverage giant Constellation Brands, Inc. (NYSE:STZ) were all excited marijuana when things looked good for the space. However, regulatory headwinds that put pressure on pot stocks caused these companies to suffer major losses on their cannabis investments. Altria Group, Inc. (NYSE:MO) is reported to have incurred a $438 million loss on its cannabis investment in Cronos Group Inc. (NASDAQ:CRON). Constellation Brands, Inc. (NYSE:STZ) reported that it lost roughly $1.1 billion from its investment in Canopy Growth Corporation (NYSE:CGC). While both Altria Group, Inc. (NYSE:MO) and Constellation Brands, Inc. (NYSE:STZ) have not spoken officially about discarding their cannabis investments, if the current state of affairs persist, these companies might abandon ship.
According to KEY Investment Partners' research, there is a lack of institutional ownership in publicly traded cannabis stocks. Since marijuana remains illegal in the United States, at the federal level, most of the plant-based cannabis businesses are listed on the Canadian Stock Exchange and have lower liquidity, lower trading volumes, and lower institutional participation, according to KEY Investment Partners.
The pot industry is one of the fastest growing industries in the world, and is expected to grow rapidly in the coming years, as more countries and states legalize the use of marijuana for medical and recreational purposes, and the drug gains social acceptance. Some of the top companies operating in the cannabis space include Cronos Group Inc. (NASDAQ:CRON), Canopy Growth Corporation (NYSE:CGC), and Organigram Holdings Inc. (NASDAQ:OGI). This piece will focus on the best cheap pot stocks to buy now.
We analyzed the marijuana industry and selected some of the best stocks with TTM PE ratio values of of less than 25. In addition to decent PE ratios, these companies have solid fundamentals, robust pipelines, and competitive market positions. That's why these pot stocks look cheap when compared to their peers. Along with each company, we have included the hedge fund sentiment and analyst ratings. We have ranked these stocks is a descending order of their PE ratios, as of January 3.
While Jushi Holdings Inc. (OTC:JUSHF) is trading at a PE multiple of 20x, as of January 3, the stock can be argued as cheap considering the company's stride's in the cannabis space and its potential to capture further market share due to its size and scale. The stock is placed among the best cheap pot stocks to buy now.
Innovative Industrial Properties, Inc. (NYSE:IIPR) focuses on the acquisition, ownership, and management of specialized industrial properties leased to state-licensed operators for their regulated medical-use cannabis facilities. The company intends to provide investors with a dividend-yielding REIT that invests in high-growth cannabis-related properties. As of January 3, the stock is trading at a PE ratio of 18.99, not too expensive for a high growth stock, and is offering a forward dividend yield of 7.10%. Industrial Properties, Inc. (NYSE:IIPR) is one of the best cheap pot stocks to buy now.
Procaps Group S.A. (NASDAQ:PROC) is a Colombian pharmaceutical company which produces generic and branded medicines, nutritional supplements, and OTC products. The company has been in business for more than 40 years and has a prominent presence in the Colombian market. The company is known for its strong focus on innovation and quality and has been expanding its footprint in the medical marijuana space and has developed the first pharmaceutical-grade CBD-based medicine for epilepsy patients. Procaps Group S.A. (NASDAQ:PROC) is trading at a PE multiple of 7x, as of January 3, and is placed seventh among the best cheap pot stocks to buy now.
Originally a lawn care company, The Scotts Miracle-Gro Company (NYSE:SMG) has emerged as a leader in the cannabis space. In recent years, the company has made a major push into the cannabis industry and has become one of the leading suppliers of hydroponic and lighting systems used to grow marijuana. Moreover, The Scotts Miracle-Gro Company (NYSE:SMG) has invested heavily in research and development in the sector, and has acquired several cannabis-related companies, such as Gavita, a Dutch company that produces specialized lighting systems for indoor growing. The Scotts Miracle-Gro Company (NYSE:SMG) is currently trading at an attractive valuation, at a PE multiple of 7x as of January 3, and is one of the best cheap pot stocks to buy now.
In addition to The Scotts Miracle-Gro Company (NYSE:SMG), for investors that are looking increase their exposure to the high-growth cannabis industry, some of the top pure-play stocks include Cronos Group Inc. (NASDAQ:CRON), Canopy Growth Corporation (NYSE:CGC), and Organigram Holdings Inc. (NASDAQ:OGI).
Canadian marijuana stocks rallied Thursday, then gave up those gains on Friday, following a Bloomberg report that U.S. Senate Democrats plan to introduce a federal cannabis decriminalization bill this month. So are Canadian marijuana stocks buys now?
Those legislative efforts would follow a year of soured optimism over the prospect of U.S. cannabis reform. That sentiment has dragged marijuana stocks lower through this year. And even if the U.S. passes full federal legalization, the implications for Canada's pot producers are unclear.
Aurora and its rivals have dealt with layoffs, facility closures and executive-team shakeups over the past few years, following losses, competition and overexpansion. Market share continues to shrink for big Canadian marijuana stocks like Hexo (HEXO), Canopy Growth (CGC) and Tilray (TLRY).
IBD only has full ratings for marijuana stocks in Canada that trade on the big U.S. exchanges. But it also tracks stocks related to the marijuana industry, like Innovative Industrial Properties (IIPR), a U.S. cannabis-focused real-estate investment trust.
MarketSmith also has limited ratings data for some U.S.-based cannabis producers that operate in legal states, like Curaleaf (CURLF), Green Thumb Industries (GTBIF) and Trulieve (TCNNF). Those marijuana stocks trade over the counter and in Canada. 041b061a72