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The marijuana industry consists of 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 such as 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 36 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 of these companies have managed to maintain revenue growth in spite of the COVID-19 pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have outperformed the broader market. MJ has provided a total return of 88.8% over the past 12 months, above the Russell 1000’s total return of 54.4%. These performance figures and all statistics in the tables below are as of April 26, 2021.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.
On March 31, 2021, New York passed a law legalizing recreational cannabis, expanding medical use, and decriminalizing possession of small amounts of marijuana, among other measures. Not all of these provisions will go into effect immediately and there is not yet a timeline by which all these measures will be fully implemented.
These are the marijuana stocks trading on the Nasdaq exchange 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.
| Best Value Marijuana Stocks on the Nasdaq | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| Village Farms International Inc. ( VFF) |
11.29 | 0.9 | 4.0 |
| Aphria Inc. (APHA) | 14.14 | 4.5 | 9.0 |
| OrganiGram Holdings Inc. (OGI) | 2.64 | 0.8 | 10.0 |
Source: YCharts
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing vegetables such as tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. On March 22, 2021, Village Farms International was added to the S&P/TSX Composite Index, which is the headline index of the Canadian equity market and includes roughly 220 of the largest and most liquid companies on the Toronto Stock Exchange (TSX). As a component of the index, Village Farms may now see additional investment from index funds and similar vehicles.
- Aphria Inc.: Canada-based Aphria is a producer, supplier, and retailer of medical marijuana products. The company announced on April 15, 2021, that its shareholders had voted overwhelmingly to approve its combination with Tilray Inc. (TLRY) under the Business Corporations Act (Ontario). Per the agreement, Tilray will acquire all outstanding Aphria shares, with Aphria shareholders receiving 0.8381 of a Tilray share of class 2 common stock for each Aphria share held. The agreement is pending court approval and a vote by Tilray shareholders.
- OrganiGram Holdings Inc.: OrganiGram Holdings is a Canada-based holding company, which, through subsidiaries, produces medical marijuana for patients. In its Q2 2021, ending February 28, OrganiGram reported a net loss of $66.4 million, versus a net loss of $6.8 million for Q2 2020. Net revenue declined by 37% year-over-year (YOY). CEO Greg Engel attributed the performance in part to challenging industry dynamics, the COVID-19 pandemic, and staffing limitations at its facility.
These are the top marijuana stocks on the Nasdaq as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest Growing Marijuana Stocks on the Nasdaq | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| GrowGeneration Corp. ( GRWG) |
45.13 | 2.6 | N/A (see description) | 143.9 |
| Cronos Group Inc. ( CRON) |
8.23 | 3.0 | N/A (see description) | 133.3 |
| Village Farms International Inc. (VFF) | 11.29 | 0.9 | N/A (see description) | 43.3 |
Source: YCharts
- GrowGeneration Corp.: GrowGeneration 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. While GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. GrowGeneration’s EPS growth is not included in the table above because the company went from negative EPS in Q4 2019 to positive EPS in Q4 2020. On April 20, 2021, GrowGeneration announced it would acquire Michigan-based Downriver Hydroponics, an indoor garden supply center with annual revenues of approximately $10 million.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company focused on research, technology, and the production and distribution of medical cannabis products and cannabis oils. Cronos Group’s EPS growth is not included in the table above because the company went from positive EPS in Q4 2019 to negative EPS in Q4 2020.
- Village Farms International Inc.: See above for company description. Village Farms International’s EPS growth is not included in the table above because the company went from negative EPS in Q4 2019 to positive EPS in Q4 2020.
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
| Marijuana Stocks on the Nasdaq with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| GrowGeneration Corp. (GRWG) | 45.13 | 2.6 | 987.5 |
| Aphria Inc. (APHA) | 14.14 | 4.5 | 315.9 |
| Village Farms International Inc. (VFF) | 11.29 | 0.9 | 261.9 |
| Russell 1000 | N/A | N/A | 54.4 |
| ETFMG Alternative Harvest ETF (MJ) | N/A | N/A | 88.8 |
Source: YCharts
- GrowGeneration Corp.: See above for company description.
- Aphria Inc.: See above for company description.
- Village Farms International Inc.: See above for company description.
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