/medicines_pharma_shutterstock_294860387_1-5bfc3b86c9e77c005183eab6.jpg)
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 Tilray Inc. (TLRY) 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 54.0% over the past 12 months, above the Russell 1000’s total return of 44.8%. These performance figures and all statistics in the tables below are as of May 27, 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 no timeline yet of a date 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.
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.
- Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group manufactures and distributes hydroponics products, including lighting equipment, climate control devices, garden accessories, and related products. The company recently announced that it had agreed to acquire House & Garden Inc., Humboldt Wholesale Inc., Allied Imports & Logistics Inc., and South Coast Horticultural Supply Inc., which are collectively known as House & Garden, for approximately $125 million.
- Aurora Cannabis Inc.: Aurora Cannabis is a Canada-based, vertically-integrated producer and distributor of medical cannabis. It engages in cannabis facility engineering, cannabis breeding and genetics research, cannabis and hemp production, and more.
These are the top marijuana stocks on the Nasdaq as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest Growing Marijuana Stocks on the Nasdaq | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| GrowGeneration Corp. ( GRWG) |
42.56 | 2.5 | N/A (see description) | 172.9 |
| Village Farms International Inc. (VFF) | 9.30 | 0.8 | N/A (see description) | 63.2 |
| Cronos Group Inc. ( CRON) |
7.77 | 2.9 | N/A (see description) | 49.6 |
Source: YCharts
- GrowGeneration Corp.: GrowGeneration operates retail hydroponic and organic specialty gardening retail outlets. It offers plant nutrition, farming soils, crops, advanced lighting technology, hydroponic and aquaponic equipment, and more. While GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. GrowGeneration’s EPS growth is not included in the table above because the company went from negative EPS in Q1 FY 2020 to positive EPS in Q1 FY 2021. The company recently announced that it had acquired The Harvest Co., a northern California-based hydroponic supply center and cultivation design innovator.
- Village Farms International Inc.: See above for company description. Village Farms International’s EPS growth is not included in the table above because the company went from positive EPS in Q1 FY 2020 to negative EPS in Q1 FY 2021.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company focused on research, technology, and the production and distribution of medical cannabis products and cannabis oils. Cronos Group’s EPS growth is not included in the table above because the company went from positive EPS in Q1 FY 2020 to negative EPS in Q1 FY 2021.
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
| Marijuana Stocks on the Nasdaq with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| GrowGeneration Corp.( GRWG) |
42.56 | 2.5 | 561.9 |
| Tilray Inc. ( TLRY) |
16.67 | 4.4 | 295.0 |
| OrganiGram Holdings Inc. ( OGI) |
2.82 | 0.8 | 64.0 |
| Russell 1000 | N/A | N/A | 44.8 |
| ETFMG Alternative Harvest ETF ( MJ) |
N/A | N/A | 54.0 |
Source: YCharts
- GrowGeneration Corp.: See above for company description.
- Tilray Inc.: Tilray is a Canada-based supplier of cannabis products to pharmaceutical distributors. The company is focused on cannabis research, cultivation, processing, and distribution of cannabis products. On May 3, Tilray announced the closing of the previously announced business combination with Aphria Inc., creating the new Tilray company. The company reported revenues of $48 million during the first quarter of 2021, down from $52.1 million a year ago. It pared losses, posting losses of $0.19 per share, up from losses of $0.49 a year ago.
- OrganiGram Holdings Inc.: OrganiGram Holdings is a Canada-based holding company that, through its subsidiaries, produces both medical and recreational cannabis. The company announced in early may that Greg Engel was stepping away from his role as chief executive officer (CEO). The company is seeking a permanent CEO.
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. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on 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.
