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The marijuana industry includes companies directly related to the research, development, and distribution of cannabis products, as well as companies that indirectly support these operations. Traditional stock market indices like the Nasdaq continue to include more companies from the marijuana industry as a growing number of regions around the world legalize marijuana. The number of U.S. states that permit marijuana use in some form increased to 35 after voters in several states approved marijuana legalization initiatives on their ballots in the recent U.S. presidential election. Some of the Nasdaq-listed marijuana companies include Aphria Inc. (APHA) and OrganiGram Holdings Inc. (OGI). Many companies in this emerging industry are posting losses as they invest heavily to focus on rapidly expanding revenue. And many companies have been able to maintain revenue growth in spite of the COVID-19 pandemic.
On November 3, 2020, voters in New Jersey, Arizona, and Montana approved ballot measures to legalize recreational marijuana, and Mississippi has voted to legalize medical marijuana use. South Dakota, approved ballot measures to approve both.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -16.9% over the past 12 months, well below the Russell 1000’s total return of 18.2%, as of November 20, 2020. All statistics in the tables below are as of November 23.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.
Best Value Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq with the lowest 12-month trailing price-to-sales (P/S) ratio. For young companies that have not reached profitability, this can provide an idea of how much business you’re getting for each dollar invested.
Source: YCharts
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing standard vegetables like tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. The company announced in early November that it had acquired the remaining 41.3% of Pure Sunfarms Corp. from Emerald Health Therapeutics Inc. Village Farms International now owns 100% of the cannabis producer’s common shares.
- Amyris Inc.: Amyris is an industrial biotechnology company that produces high performance products for the health and wellness, clean beauty, and flavor and fragrance markets. The company uses cannabis in some of its products. Amyris posted a net loss of $21.5 million as revenue declined 2.0% in Q3 2020, which ended September 30, 2020. The net loss, however, was only about one third of the net loss reported in the same quarter a year ago, reflecting lower interest expenses and gains from a change in the fair value of derivative instruments and debt.
- NIC Inc.: NIC is a provider of digital government services. It aids state and local government in providing various Internet-related services to business and citizens across the U.S. One of its technology platforms is designed to help governments regulate the marijuana industry.
Fastest Growing Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales show that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.
Source: YCharts
- GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products. The company operates retail hydroponic and organic specialty gardening retail outlets. It offers plant nutrition, farming soils, crops, advanced lighting technology, hydroponic and aquaponic equipment, and more. GrowGeneration recently announced the completion of its acquisition of California-based The GrowBiz, one of the largest hydroponic garden centers in the U.S.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils.
- Canopy Growth Corp.: Canopy Growth is a Canada-based, multi-brand producer of recreational and medical marijuana.
Marijuana Stocks on the NASDAQ with the Most Momentum
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
| Marijuana Stocks on the NASDAQ with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| GrowGeneration Corp. (GRWG) | 29.16 | 1.4 | 625.4 |
| Aphria Inc. (APHA) | 6.13 | 1.8 | 35.6 |
| Canopy Growth Corp. (CGC) | 23.72 | 8.8 | 34.5 |
| Russell 1000 | N/A | N/A | 18.2 |
| ETFMG Alternative Harvest ETF (MJ) | N/A | N/A | -16.9 |
Source: YCharts
- GrowGeneration Corp.: See above for company description.
- Aphria Inc.: Aphria is a Canada-based company that produces and sells medical and recreational cannabis. The company announced in early November that it had entered into an agreement to acquire SW Brewing Company LLC for approximately $300 million. Aphria says that the craft brewer, along with its flagship 420 beverage offerings, projects a brand that “aligns with a cannabis lifestyle”, and that the acquisition will help Aphria expand into the U.S.
- Canopy Growth Corp.: See above for company description.
