Many U.S. cannabis companies appear to be performing well in the wake of the COVID-19 pandemic. However, several Canadian marijuana companies continue to face headwinds, with restrictions on retail cannabis stores still in place.
The COVID-19 pandemic has affected nearly every part of the global economy, including the cannabis industry. In many U.S. states, cannabis dispensaries were designated as essential businesses. Cannabis sales boomed in some states during the first few months of the coronavirus outbreak, driven in part by more time spent at home and increased anxiety. Marijuana growers and retailers benefited, as did ancillary providers selling gardening supplies and other products to these companies.
First, let’s cover some of the basics you need to know before investing in marijuana stocks:
Impact of COVID-19 on marijuana stocks
Learn about other stocks in this sector and how consumer staples have traditionally performed.
Source: Business Wire
Healthcare is a growing industry, and cannabis investors may benefit from getting acquainted with it.
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Let's look at 10 of the best marijuana stocks, funds and other investments to ride a renewed cannabis wave.
Today, it operates in 23 states, including Arizona, Florida, Illinois and Massachusetts. It owns and operates 108 dispensaries, 23 cultivation sites, and 30 processing sites. And Curaleaf is becoming one of the world's leading cannabis companies by using science to enhance the customer experience.
Data is as of Aug. 18.
It continues to hold warrants to exercise 88.5 million shares by Nov. 1, 2023, and 51.2 million by Nov. 1, 2026. If exercised, they would give it more than 50% ownership in the company.
IIPR is a popular stock among analysts, garnering six Buys versus just two Holds and no Sell calls of any sort. And it has been one of the best marijuana stocks to own for years, delivering an annualized total return of 91.0% since this point in 2018.
One of the post-merger highlights was Tilray's SweetWater Brewing division opening a Colorado brewery and SweetWater Mountain Taphouse at the Denver International Airport in July. SweetWater also launched 420 Imperial IPA. At the end of June, SweetWater partnered with the company's Broken Coast craft cannabis brand to launch Broken Coast B.C. Lager.
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.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.
HITI.V is top for value and JUSH.CX is top for growth and momentum
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have slightly outperformed the broader market. MJ has provided a total return of 36.9% over the past 12 months, above the Russell 1000 index’s total return of 35.0%. These market performance numbers and all statistics in the tables below are as of Aug. 23, 2021.
These are the marijuana stocks 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.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.