These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves (or returns to) profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the past 12 months.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have underperformed the broader market. MJ has provided a total return of -7.9% over the past 12 months, well below the Russell 1000’s total return of 30.4%. These market performance numbers and all statistics in the tables below, except for the “Fastest Growing Marijuana Stocks” table, are as of Nov. 24, 2021. The statistics in the growth table are as of Nov. 30, 2021.
The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal, and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.
Best Value Marijuana Stocks.
Below we look at the top five marijuana stocks with the best value, the fastest growth, and the most momentum.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
Fastest Growing Marijuana Stocks.
HEXO, GRWG, and SNDL are top for value, growth, and momentum, respectively.
HEXO was founded in 2013 to serve the Canadian medical cannabis market and expanded to serve the adult-use recreational market following nationwide legalization. The consumer packaged goods cannabis company serves the Canadian adult-use markets under its HEXO Cannabis, Up Cannabis and Original Stash brands, and the medical market under HEXO medical cannabis. The company also trades in the U.S. under HEXO.
Aphria produces, grows, and markets primarily medical cannabis products. Its medical cannabis is 100% greenhouse grown, allowing its plants to benefit from natural sunlight. The Canadian company’s products include oils, softgels, oral sprays, and cartridges. Aphria is in the process of merging with Tilray Inc. to create the world’s largest cannabis company by pro forma revenue. Aphria also trades in the U.S. under APHA.
Fire & Flower Holdings, through its subsidiary Fire & Flower Inc., operates an independent retail store selling cannabis products for recreational use. The company's digital platform, Hifyre, connects consumers with a range of cannabis products. Fire & Flower has dozens of retail locations throughout Alberta, Manitoba, Ontario, Saskatchewan, and Yukon.
TerrAscend is an integrated Canadian cannabis company offering products for both medical and recreational use. The company has a portfolio of business including: Arise Bioscience Inc., a manufacturer and distributor of hemp products; The Apothecarium, a cannabis dispensary; and Ilera Healthcare, a medical marijuana cultivator, processor, and distributor; as well as others.
Aurora Cannabis is a major cannabis producer and a licensed distributor. The company, based in Canada, has operations in both the medical and consumer cannabis areas and has a division focused on cannabidiol products (CBD) for distribution in the U.S. CBD is one of the most active and prevalent ingredients in cannabis. Aurora Cannabis also trades in the U.S. under ACB.
#8 HEXO Corp. (HEXO.TO)
Tilray is a Canada-based company focused primarily on cultivating, processing, and distribution of medical cannabis products. The company also is heavily focused on medical cannabis research. Its products include dried cannabis and cannabis extracts. As mentioned, Tilray and Aphria plan to merge. While Tilray is a Canadian company, it only trades on the NASDAQ exchange.
The Canadian cannabis industry has grown dramatically in size since the national government legalized cannabis in 2018. Companies in the marijuana industry are involved in the cultivation, growth, and distribution of cannabis and related products for both recreational and medical use. Many new entrants to the industry have done so by investing in cannabis businesses or by launching new cannabis or cannabis-related divisions.
Investors are carefully scrutinizing Canadian cannabis companies' underlying financials to determine which ones offer the best growth on a sustained basis. That focus is especially true since many of these are young companies that launched on their rapid-growth path in the few years since legalization. Many of them are continuing to generate major losses as they focus on developing new products, and expanding their markets through internal growth and acquisitions. As a result, these companies' prospects are measured mainly by revenue growth rather than net income growth. We detail below the 10 biggest Canadian cannabis companies ranked by 12-month trailing revenue. This list is limited to companies which are publicly traded in the U.S. or Canada, either directly or through ADRs. Some foreign companies may report semiannually, and so may have longer lag times. All data throughout is courtesy of YCharts and as of April 2, 2021.
Ayr Wellness cultivates, manufactures, and distributes a broad range of cannabis and related products. Based in Canada, the company offers brands including Kynd, Sira Naturals, Jimmy's Choice, cannabis-based vape products line Entourage.
Canopy Growth, headquartered in Canada, produces medical marijuana products. The company has the distinction of having been the first federally-regulated and licensed publicly-traded cannabis grower in North America. It is among the largest cannabis companies in the world by market capitalization. Canopy Growth also trades in the U.S. under CGC.
Village Farms International is a greenhouse grower that sells a variety of produce to grocers in the U.S. and Canada. The Canada-based company operates a cannabis business through its wholly-owned subsidiary, Pure Sunfarms. It has established a joint venture called Village Fields Hemp USA, LLC, to cultivate hemp and extract CBD for sale in the U.S. Village Farms International also trades in the U.S. under VFF.
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Zenabis Global cultivates and sells cannabis products for both recreational and medical use. The company sells under the brand name Zenabis for medical cannabis products, and under the brand names Namaste, Re-Up, and Blazery, for recreational-use products. Zenabis operates millions of square feet of combined greenhouse and indoor facility space across Canada.
#2 Canopy Growth Corp. (WEED.TO)
#9 Fire & Flower Holdings Corp. (FAF.TO)
As more and more states legalize marjiuana, federal legalization in the U.S. seems inevitable. Not only are more states passing legislation to permit recreational use, but a vast majority of Americans also support legalization. According to a recent survey, Pew Research found that 91% of people in the U.S. believe marijuana should be legal for either medical or recreational use, with 60% in favor of both. President Joe Biden is in favor of decriminalizing marijuana, while Senate Majority Leader Chuck Schumer is ready to push ahead with full legalization efforts even if Biden isn’t completely on board just yet.
Image source: Getty Images.
When legalization happens, there are many Canadian cannabis producers that will be ready to expand their presence south of the border. Canopy Growth (NASDAQ:CGC) , soon-to-be-joined Aphria (NASDAQ:APHA) and Tilray (NASDAQ:TLRY) , Cronos (NASDAQ:CRON) , and Aurora Cannabis (NASDAQ:ACB) could be some of the biggest winners if (or, when) the U.S. pot market opens up.
Canopy Growth has partnerships set up so that it can start working on expansion almost immediately after legalization takes place. One of the first things it would be able to do is close on its acquisition of Acreage Holdings . Although the two companies came to an agreement in 2019, the transaction is still pending. The multistate operator has a footprint in 13 states with 29 dispensaries that are up and running. In 2020, it reported sales of $114.5 million, which rose 55% year over year. With Acreage Holdings, Canopy Growth would be ready to rival big names like Curaleaf and Trulieve right off the bat.