Dennis Hammer is a writer and finance nerd with six years of investing experience. He writes about personal finance for Wealthsimple. Dennis also manages his own investment portfolio and has funded several businesses in the past. Dennis holds a Bachelor's degree from the University of Connecticut.
As marijuana legalization and cultural acceptance grows, many companies in the United States and Canada can now openly produce, cultivate, and process cannabis, as well as develop unique products for medical and recreational use.
What are marijuana stocks?
Marijuana stocks are shares in companies directly involved in the production, processing, and distribution of cannabis-derived products. We can’t see the future, but we believe they represent a strong opportunity for growth.
But keep in mind that marijuana stocks shouldn’t make up the entirety of your profile. In fact, they should only represent a small part of your overall investment strategy. You should never put all of your eggs in one basket, no matter how good the deal looks. Instead, diversify your investments to spread out your risk so you don’t lose your savings.
A list of Canadian marijuana stocks
In June 2018, the Cannabis Act made cannabis use completely legal throughout the country. As such, the cannabis industry has flourished. Here’s a list of Canadian marijuana stocks you might add to your portfolio.
|Canopy Growth Corporation||Canada Growth Corporation grows and sells medical cannabis, including dried plant matter, softgel capsules, hemps, oils, and concentrates. It owns several brands, including Tweed, Spectrum Cannabis, DNA Genetics, CraftGrow, and Leafs by Snoop. It also participates in clinical research to explore the effectiveness of cannabinoids on concussion-related neurological conditions.||$9.108 billion|
|Namaste Technologies Inc.||Through its subsidiaries, Namaste ecommerce retails vaporizers and smoking accessories. It operates CannMart, Canada’s first non-cultivation medical cannabis marketplace, providing products from a selection of federally licensed cultivators. It sells across a network of websites in 26 countries.||$93.327 million|
|Emerald Health Therapeutics||Emerald Health Therapeutics produces dry cannabis and cannabis oils for medical and recreational purposes. It is a “seed-to-sale” business with experience in large-scale agriculture. It plans to continue developing pharmaceutical, botanical, and so-called nutraceutical products that provide medical and wellness benefits.||$37.027 million|
|The Supreme Cannabis Company Inc||The Supreme Cannabis Company produces high-quality marijuana for a wide selection of brands and partners, such as Medigrow, 7Acres, and Cambium. The company focuses on disciplined, well-managed growth and high-quality products.||$81.564 million|
|OrganiGram Holdings||OrganiGram Holdings owns a portfolio of companies that produce and sell dry cannabis products (plant cuttings, pre-rolls, blends, and dried flowers), cannabis oils, vaporizers, and accessories. It sells wholesale and retail online and through phone orders.||$332.61 million|
|Origin House||This is a private equity firm that acquires majority stakes in cannabis brands. It focuses on consumer brands, industry infrastructure, and intellectual property.||$574 million|
|The Green Organic Dutchman Holdings||Green Organic is a cannabis-based research and development company that produces organic cannabis products, including dried plants, oils, and seeds.||$151.851 million|
|Aurora Cannabis||Aurora Cannabis produces and sells medical cannabis products. It is vertically integrated across the entire industry, including cannabis breeding, genetic research, product development, home cultivation, and retail and wholesale distribution. It sells dried cannabis and cannabis oils, vegan capsules, hemp products, and vaporizers and vaporizing accessories. It also operates a network of cannabis counseling centers called CanvasRX.||$1.592 billion|
|Aphria Inc.||Aphria produces a variety of dry and oil cannabis products for medical use. It sells online and through traditional sales channels to healthcare professionals and patients directly. The company boasts that it’s one of the cheapest cannabis options.||$1.763 billion|
|CannTrust Holdings Inc.||CannTrust Holdings produces and sells cannabis for medical and recreational purposes. It sells dried and extracted products directly to consumers. It has an exclusive partnership with Apotex Inc, a Canadian pharmaceutical corporation.||$803.159 million|
|TerrAscend Corp.||This biopharmaceutical and wellness company cultivates, develops, and sells medical cannabis products under the Knüba Naturals brand, and offers support and education programs for patients and physicians.||$302.83 million|
|Newstrike Brands Ltd.||Newstrike produces and sells medical cannabis products (dried and fresh cannabis, edibles, vaping tools, seeds, plants, resin, and oil) under the brand name Up Cannabis.||$330 million|
|Sunniva Inc.||Sunniva produces medical cannabis products by purchasing plant matter and turning it into oils. It also runs a chain of medical marijuana clinics throughout Canada and sells custom white-label products throughout North America.||$6.077 million|
|HEXO Corp.||HEXO Corp. produces, markets, and sells a variety of dried cannabis products. It also sells a unique cannabis oil sublingual mist product and a cannabis powder product. It serves medical and recreational segments and recently opened a facility in Greece to establish in Eurozone markets.||$411.05 million|
|Cronos Group Inc.||This is an investment firm that holds equity in companies that are licensed to produce and distribute marijuana, or seeking their license to do so. This company typically seeks minority positions in its investments, but usually wants representation on the board.||$3.073 billion|
|Auxly Cannabis Group Inc.||Auxly cultivates cannabis and develops cannabis-based products. It licenses its products to wholesalers and resellers across the entire cannabis value chain.||$153.184 million|
|Valens GrowWorks Corp.||This biotechnology company researches and develops cannabis-based products, mostly oils. It also has a service laboratory division that analyzes and tests cannabis products.||$292.456 million|
|Aleafia Health Inc.||This company produces a large portfolio of cannabis products, including oils, sprays, and capsules. It also operates a network of medical cannabis clinics and education centers.||$198.59 million|
A List of US Marijuana Stocks
Unlike Canada, marijuana is still federally illegal for recreational use in the United States even though it’s been legalized or decriminalized in several states.
|Terra Tech Corp||Terra Tech is a cannabis-focused agriculture company that produces hydroponic herbs and leafy products, and operates medical marijuana retail dispensaries under the Blüm brand which provides plant-based, extracted, and edible products.||$17.338 million|
|Curaleaf Holdings||Curaleaf Holdings, Inc. is an integrated medical and wellness cannabis operator in the US that cultivates and distributes a variety of cannabis-based and CBD-based products, including oils, flowers, pre-rolls, lotions, tinctures, capsules, and edibles.||$4.351 billion|
|GW Pharmaceuticals||GW Pharmaceuticals is a biopharmaceutical company that develops and commercializes cannabinoid prescription medicines extracted from cannabis. It has license and development agreements with Bayer HealthCare AG, Almirall S.A., and Neopharm Group.||$3.406 billion|
|Harvest Health & Recreation Inc.||Even though this company is headquartered in Vancouver, Canada, it cultivates, manufactures, and retails cannabis in the United States through a chain of dispensaries.||$494.27 million|
|Cresco Labs Inc.||Cresco Labs manufactures and sells medical cannabis. It sells dry flower, cannabis oil, as well as capsule, oral, and sublingual productions. It also has a line of cannabis-infused edibles, including candies and chocolates.||$1.309 billion|
|Green Thumb Industries Inc.||Green Thumb Industries manufactures and sells cannabis products to third-party retailers. It also sells some finished products directly to consumers through its retail stores under the Rise brand. It owns Rythm, Dogwalkers, The Feel Collection, Beboe, and other brands.||$3.045 billion|
|Liberty Health Sciences Inc.||Liberty Health Sciences produces and distributes cannabis in Florida. It works closely with the Veterans Cannabis Project to support research into the treatment of service-related trauma with cannabis.||$131.154 million|
|Charlotte’s Web Holdings Inc.||Under the brand name Charlotte’s Web, this company produces and sells cannabidiol wellness products, such as topicals, tinctures, and capsules. It sells to wholesalers, retail stores, and through its website.||$467.346 million|
|CV Sciences, Inc.||CV Sciences, Inc. has two segments: 1) A consumer products division makes and sells cannabis oil products for vaping, beauty care, and foods, as well as raw materials for resale, and 2) a pharmaceuticals division that uses cannabinoids to treat medical conditions.||$67.899 million|
|Acreage Holdings, Inc.||Formally known as High Street Capital Partners, Acreage Holdings is an investment firm that focuses on the cannabis industry.||$313.876 million|
|iAnthus Capital Holdings Inc.||iAnthus owns and operates a chain of cannabis cultivation and processing facilities. It owns 21 dispensaries in 11 states.||$35.299 million|
|TILT Holdings||TILT Holdings is a diverse company that provides various products and services to other businesses in the cannabis space. It serves companies in the US, Canada, and Europe with various forms of cannabis, vaporizing devices, inventory and analytics systems, and marketing services.||$144.305 million|
|Trulieve Cannabis Corp||Trulieve is a medical cannabis company that cultivates and produces its own products and distributes them through dispensaries in Florida. It sells smokable flowers, pods for vaporizing, topicals, tinctures, and capsules. It also delivers products to its customers’ homes.||$2.203 billion|
|Innovative Industrial Properties, Inc.||This company is a real estate investment firm that focuses on the acquisition, ownership, and management of commercial properties for state-licensed medical-use cannabis businesses.||$2.534 billion|
|Planet 13 Holdings Inc.||This company produces and distributes medical and recreational cannabis in Nevada through its own high-end dispensaries. Its mission is to operate ultra-high-end dispensaries in tier-one markets nationwide.||$383.361 million|
|Flower One Holdings Inc.||Through subsidiaries, Flower One cultivates and produces marijuana products for Nevada markets. It focuses on contract cultivation and wholesale sales. It owns a massive cultivation and production facility in Las Vegas and offers a range of cannabis products, including pre-rolls, oils, distillates and concentrates, topicals, and edibles.||$69.16 million|
|MedMen Enterprises||MedMen cultivates, manufactures, and distributes cannabis products for recreational and medical use. It has licenses for 69 retail stores and 17 cultivation/production facilities. It claims to be the single-largest financial supporter of progressive marijuana laws at the local, state and federal levels.||$57.752 million|
|MariMed Inc.||MariMed provides consulting and ancillary services to cannabis facilities and brands, including design, development, operations, funding, optimization, production, dispensing, legal, accounting, human resources, and administrative services. It directly manages several cannabis facilities.||$38.458 million|
Marijuana Stocks FAQ
Yes, marijuana stocks are legal in Canada. Canada legalized recreational marijuana use in 2018, so the country represents an exciting emerging market with lots of growth potential. It’s no surprise that cannabis investments are growing popular.
That said, the industry is still quite young. It’s full of inexperienced players who are working with cannabis at scale for the first time. Plus there is a lot of competition for this new market of customers. How well these marijuana stocks will perform isn’t quite clear yet.
Purchasing weed stocks is similar to buying any other type of stock. You simply need to open an account with a broker, add funds to your account, and then use the broker’s platform to execute your trade.
Marijuana companies aren’t unlike other types of companies. When you evaluate their stock, be sure to research their management teams, competitive position, financial statements, and growth strategies. Pay careful attention to their all-in cost of sales per gram (their total per-gram cost of producing cannabis) and cash cost per gram (their total per-gram cost of producing cannabis).
But before you start making trades, it’s important to keep a few additional things in mind.
Medicinal vs. recreational
While some places in the world allow citizens to use cannabis recreationally, many only permit marijuana use for medicinal purposes. The United States, for example, is a patchwork of legal environments where each state creates its own legislation for each type of cannabis use. Make sure you understand where a company operates and what it sells before you buy its stock.
The types of cannabis companies
Like most industries, cannabis is a diverse sector. Individual companies play different roles in the supply chain. Some are growers and cultivators who produce and harvest plant matter in indoor and outdoor facilities. Some develop pharmaceutical drugs. Some operate retail stores that sell directly to consumers. And others offer support services, such as lighting systems, packaging materials, and management services.
Risks of the cannabis industry
When it comes to investing, there is always risk, especially if you buy individual stocks. However, the cannabis industry comes with additional risk that you should be aware of:
- Supply and demand imbalances: As a new, immature industry in the agriculture sector, marijuana is prone to irregularities in supply and demand. The demand ceiling isn’t known yet. In Canada for instance, some companies are reducing their production because supply has overcome demand, causing prices to fall.
- Legal risks: The legal environment for marijuana is constantly changing all over the world. It’s hard to predict how a country will respond in the future. If a company suddenly loses access to its market, it could spell disaster.
- Over-the-counter stock risks: Some cannabis companies trade over-the-counter, meaning they are not required to file financial statements. Without this information, it’s hard to truly evaluate a stock.
- Black market competition: Even though more and more jurisdictions are legalizing cannabis use and sale, there’s still a vibrant black market for it. It’s hard to understand a company’s role in the market when it’s full of illegal producers and sellers.
The cannabis landscape has changed dramatically over the last few years. While some countries (like Canada and Mexico) have legalized recreational use, many countries haven’t. The United States is a complicated legal patchwork, but is trending toward legalization.
While the industry may be new, experts expect impressive growth. According to market research firm Grand View Research, the cannabis industry is expected to grow globally to $74 billion by 2027. If you want to get in, now seems to be a promising time, provided you pick good companies who are prepared to meet the market’s increasing demand.
Ultimately, you’ll have to decide if marjuana stocks are right for your portfolio. We strongly encourage you to perform careful stock research before adding any stocks to your portfolio. Make sure you understand the potential for growth and all risks involved. And as always, do not invest your entire savings into a single stock or even a single industry. Diversify to protect yourself.
Instead of purchasing marijuana stocks directly, consider purchasing an ETF. An ETF is a pool of investor money used to buy stocks and other securities. As an investor, you can buy shares of the ETF. These shares are bought and sold on the open market—you don’t have to be part of a private fund. When you invest in an ETF, you essentially invest in all the stocks within the fund.
Since each share of an ETF represents a piece of everything the ETF owns, you can gain significant exposure to a group of stocks with a single trade. It also comes with built-in diversification to protect your investment.
Cannabis ETFs, for example, are funds that invest in companies that grow, cultivate, distribute, research, and sell cannabis products, or companies that have some exposure to cannabis stocks (such as a pharmaceutical company that is investing in cannabis).
However, this does not mean that cannabis ETFs are inherently safe. There is always risk, especially when you’re dealing with an industry like cannabis that faces higher volatility. It’s also important that you have a very clear understanding of the fee structure of any ETF you buy as industry-specific funds sometimes have high costs.
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