Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -28.6% over the past 12 months, well below the Russell 1000’s total return of 25.2%. These market performance numbers and all statistics in the tables below are as of Jan. 6, 2022.
GRWG is top for value and growth, and IIPR is top for momentum
Below we look at the top five marijuana stocks with the best value, the fastest growth, and the most momentum.
Best Value Marijuana Stocks
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.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), an exchange-traded fund, have significantly underperformed the broader market. MJ has provided a total return of -21.7% over the past 12 months, well below the benchmark Russell 1000 Index’s total return of 26.5%. These performance figures and all statistics in the tables below are as of Dec. 31, 2021.
Here are the top three marijuana stocks on the Nasdaq with the best value, fastest growth, and most momentum.
Best Value Marijuana Stocks on the Nasdaq
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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
Some of the Nasdaq-listed marijuana companies include Tilray Inc. (TLRY) and OrganiGram Holdings Inc. (OGI). Many of these companies have managed to maintain fast revenue growth in spite of the COVID-19 pandemic.
GRWG, HYFM, and OGI are top for value, growth, and momentum, respectively
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
• Global X Cannabis ETF (POTX). With the lowest expense ratio amongst the ETFs noted in this article (0.51%), this ETF also posts respectable returns in excess of 11% year-over-year in September 2021. This passively managed fund outperforms many of the actively managed funds above, making the combination of a lower expense ratio, better performance and a rare dividend yield of roughly To help you choose the best cannabis investments, we take a closer look at stocks and funds, as well as a few less dank offerings it’s perhaps better to avoid. There are both pure plays—firms that specialize exclusively in bud—and large-cap names that also have some pot industry exposure..14 per share, as of writing, an attractive prospect for those looking to tap into cannabis sector growth.
• Scotts Miracle-Gro Co. (SMG). Where does a company best known for plant fertilizers come into the cannabis mix? If you can make backyard plants grow, odds are you can make cannabis grow. For investors looking for the proven track record of a large cap stock with a leg in the growing cannabis industry, Scotts could be a fit. It’s acquired multiple cannabis-adjacent and pure cannabis companies and even built a brand new 50,000 square foot facility for R&D to explore how their fertilizer products impact cannabis growth. With a P/E ratio around 15.7 and a 1.7% dividend yield, Scotts stands as a respectable choice for investors exploring cannabis in their portfolios.
• Altria Group Inc. (MO). You’ll know this stock best as the maker of Marlboro and one of the behemoths in the tobacco sector (along with its dabblings in the adult beverage industry). Because of that, for ESG investors, Altria’s likely not an option. For those who don’t mind the vice, the company’s making a play for cannabis, holding a substantial stake in Cronos Group, detailed above. While the stock took a substantial hit from its investment in JUUL, share prices have been near their one-year highs. Analysts have noticed and the stock comes complete with several Buy and Strong Buy ratings and a dividend yield that only stocks in this sector can bear: 7.2%.
The Best Large-Cap Stocks with Cannabis Exposure
With the growing acceptance of cannabis among American consumers and their elected representatives, this edgy asset class offers your portfolio an excellent source of growth. According to data from Leafly, an online marijuana marketplace, legal U.S. cannabis sales—medicinal and recreational—increased 71% in 2020, to a total of $18.3 billion.
• Amplify Seymour Cannabis ETF (CNBS). Like most of this sector’s ETFs, CNBS is short on history—inception date: 2019—which gives investors little to go on for historical performance. However, with a low NAV in the $20 per share range, inventors can get a taste for the industry without risking a positive drug test at the workplace. Shares of CNBS are up more than 72% year over year, although the ETF is well off its it February 2021 highs near $40, making now a great time to jump in. Like other ETFs in the cannabis sector, the expense ratio is high at 0.75%.
Automatically Save And Invest in Your Future With Acorns
• Constellation Brands, Inc. Class A (STZ). Spirits are Constellation’s main game, but like Altria, this company is diversifying into cannabis via investment in Canopy Growth (CGC), a Canadian cannabis producer. Holding a 38.6% share of the company, Constellation saw a substantial return on investment in 2020. While not a pure cannabis play, this analyst-favorite stock is having a heyday with a one-year return of almost 15% and a dividend yield of 1.5%.
• Cronos Group (CRON). As a global brand that makes a wide variety of adult-use cannabis and CBD products, year-over-year sales are up a respectable 58%. Maybe it’s the pandemic. Maybe it’s a carefully cultivated reputation for high-quality cannabinoids. Either way, Cronos displays controlled growth, but investors need to have a sense of adventure, with its 52-week price fluctuation between $4.92 and $15.83 per share.