In this article, we discuss 11 best CBD stocks to buy now. If you want to see more stocks in this selection, check out 5 Best CBD Stocks To Buy Now.
The cannabis industry in 2022 had mixed results. While some new markets experienced significant growth, sales in many established markets decreased, slowing or even reversing growth in those areas. This can partly be attributed to the impact of COVID-19 on the wider economy, but it resulted in numerous companies facing challenges such as job cuts, financial difficulties, and increased debt.
However, 2022 had its positive aspects as well. Three more American states passed laws legalizing the use of cannabis for adults, and recreational sales were launched in other states. On a federal level, the Biden administration made progress towards reform by pardoning federal offenses for simple marijuana possession and directing a review of the classification of cannabis under federal law. Additionally, Congress passed the Medical Marijuana and Cannabidiol Research Expansion Act. At the same time, legal retailers continue to struggle with onerous taxes, regulations, and competition from the illegal market. Many of these same challenges are likely to persist throughout 2023, including the slump in wholesale and retail cannabis prices.
The growth rate of legal cannabis sales in the United States, which does not require federal legalization, is expected to increase at a rate with double-digit annual compound growth, said Cowen analyst Vivien Azer in a report on January 10. According to Rick Maturo, the Director of Insights and Intelligence for the cannabis data company BDSA, the pressure of lowering prices and competition from illegal sources will lead to a consolidation of the thousands of US cannabis brands. He also suggested that the sales projections for cannabis in New York may decrease due to the state's difficulty in combating the illicit market and issues with establishing social equity licensees. At the same time, Maturo predicts an increase in the marketing of premium edible and concentrated products that are marketed as containing "solventless" cannabinoids.
Marijuana is rapidly gaining popularity in multiple states. A recent poll by the Hobby School of Public Affairs at the University of Houston shows that the majority of Texans support the legalization of medical marijuana. According to the poll results, 82% of Texans are in favor of the Legislature passing a bill that would allow people to use marijuana for medical purposes with a prescription. Additionally, 56% of those polled strongly support medical marijuana. The support was consistent across different demographics, with 85% of Latino Texans, 83% of Black Texans, 80% of white Texans, 83% of women, 80% of men, 93% of Democrats, 79% of independents, and 73% of Republicans all expressing approval.
Some of the best marijuana stocks to consider include Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY).
Our Methodology
We selected the following marijuana stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm.
GrowGeneration Corp. (NASDAQ:GRWG) was founded in 2008 and is based in Greenwood Village, Colorado. GrowGeneration Corp. (NASDAQ:GRWG) is involved in the hydroponic and organic gardening retail industry in the US. It sells and markets products such as nutrients, lighting, environmental control systems, and accessories for hydroponic gardening and other indoor and outdoor growing. Its target customers are commercial and urban cultivators who grow specialty crops like organic greens and plant-based medicines. In March 2021, GrowGeneration Corp. (NASDAQ:GRWG) acquired Aquarius Hydroponics, an indoor-outdoor garden supply center specializing in hydroponics systems, lighting, and nutrients, representing its entry into Massachusetts' cannabis market.
On November 16, GrowGeneration Corp. (NASDAQ:GRWG) formed a strategic partnership with Grodan, a leading producer of stone wool growing media solutions for hydroponics operations. The partnership between GrowGeneration and Grodan will strengthen GrowGen's market position and expand the availability of Grodan products to more customers at competitive prices.
Alliance Global Partners analyst Aaron Grey on November 8 maintained a Neutral rating on GrowGeneration Corp. (NASDAQ:GRWG) and lowered the firm's price target on the shares to C$4 from C$4.50 following the Q3 results. The analyst cited uncertainty about when the growth of the industry will return to a sustainable level due to the absence of promotional activity.
According to Insider Monkey’s data, 5 hedge funds were bullish on GrowGeneration Corp. (NASDAQ:GRWG) at the end of the third quarter of 2022, compared to 4 funds in the prior quarter. The collective stakes in Q3 2022 amounted to $7.3 million, up from $6.2 million in Q2. D E Shaw is the biggest stakeholder of the company, with 889,524 worth $3.1 million.
Like Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY), GrowGeneration Corp. (NASDAQ:GRWG) is one of the best marijuana stocks to montior.
10. Village Farms International, Inc. (NASDAQ:VFF)
Number of Hedge Fund Holders: 6
Village Farms International, Inc. (NASDAQ:VFF) was founded in 1989 and is headquartered in Delta, Canada. The company, along with its subsidiaries, grows, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. It operates through four business segments – Produce, Cannabis-Canada, Cannabis-U.S., and Energy. Village Farms International, Inc. (NASDAQ:VFF) is also involved in the production and distribution of cannabis products to licensed providers and government agencies in Canada and other countries. It develops and sells cannabinoid-based health and wellness products including ingestible, edibles, and topical products. It is one of the best marijuana stocks to invest in.
On January 3, Village Farms International, Inc. (NASDAQ:VFF) announced the advancement of its international cannabis strategy by starting to ship cannabis products to Israel. Village Farms International, Inc. (NASDAQ:VFF) also disclosed that it is continuing to implement its global cannabis strategy, which includes increased sales in the Australian medical market and plans to enter the German medical market.
Alliance Global Partners analyst Aaron Grey on February 3 maintained a Buy recommendation on Village Farms International, Inc. (NASDAQ:VFF) but lowered the firm's price target on the shares to $3 from $6. This change is due to the recent equity raise by the company and the anticipated trends for Q4. The analyst acknowledged the continued cash burn from produce but still views Village Farms International, Inc. (NASDAQ:VFF) as a stable player in the cannabis industry and has seen consistent share performance over the past two years among Canadian LPs.
According to Insider Monkey’s third quarter database, 6 hedge funds were bullish on Village Farms International, Inc. (NASDAQ:VFF), compared to 5 funds in the prior quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with 249,661 shares worth $477,000.
Clever Leaves Holdings Inc. (NASDAQ:CLVR) is a Florida-based cannabis company engaged in the cultivation, extraction, manufacturing, commercialization, and distribution of cannabinoid products internationally. The Non-Cannabinoid segment of the company is involved in the creation, production, promotion, sale, distribution, and commercialization of nutraceuticals and other natural remedies, wellness products, detoxification products, and nutritional and dietary supplements. It is one of the best marijuana stocks to monitor.
On November 11, Canaccord analyst Bobby Burleson downgraded Clever Leaves Holdings Inc. (NASDAQ:CLVR) from Buy to Hold and lowered the price target on the shares to 80 cents from $3. He believes that Clever Leaves Holdings Inc. (NASDAQ:CLVR) has established a strong business to meet the demand for global cannabis, but he is being cautious about the timing of significant revenue growth. The trimmed price target is due to the lower earnings estimates and general reduction in valuations for the cannabis sector, according to the analyst.
According to Insider Monkey’s Q3 data, 6 hedge funds were long Clever Leaves Holdings Inc. (NASDAQ:CLVR), compared to 5 in the last quarter. Thomas Steyer’s Farallon Capital is the largest stakeholder of the company, with 2.46 million shares worth $1.48 million.
Organigram Holdings Inc. (NASDAQ:OGI) was incorporated in 2010 and is headquartered in Toronto, Canada. The company engages in the production and sale of cannabis and cannabis-derived products in Canada. It offers medical cannabis products, such as cannabis flowers, gummies, cannabis oils, vaporizers, cannabis edibles, and concentrates. Organigram Holdings Inc. (NASDAQ:OGI) is one of the premier marijuana stocks to consider.
On January 12, Organigram Holdings Inc. (NASDAQ:OGI) reported a Q1 net income of $5.33 million, and revenue for the period climbed 42.4% year-over-year to $43.3 million, beating Wall Street estimates by $10.89 million. The company anticipates that its revenue for FQ2 2023 will be higher than its revenue for FQ2 2022.
Stifel analyst Andrew Partheniou upgraded Organigram Holdings Inc. (NASDAQ:OGI) on January 13 to Buy from Hold with an unchanged price target of C$1.50, due to the company's strong Q1 results, which showed profitability that exceeded expectations and significant cash generation. The analyst has also raised his profitability estimates to reflect the Q1 performance, the company's production expansions and innovative efforts, and management's gross margin guidance.
According to Insider Monkey’s third quarter database, Organigram Holdings Inc. (NASDAQ:OGI) was part of 7 hedge fund portfolios, with collective stakes worth $3.7 million. D E Shaw held the largest stake in the company, with 2.4 million shares worth $2.15 million.
Cronos Group Inc. (NASDAQ:CRON) was founded in 2012 and is based in Toronto, Canada. Cronos Group Inc. (NASDAQ:CRON) is a cannabinoid company that operates in the hemp-based supplement and cosmetic product market. The company sells its products through e-commerce, retail, and hospitality channels under the Lord Jones and Happy Dance brands in the US. Additionally, Cronos Group Inc. (NASDAQ:CRON) is involved in the cultivation, production, and sales of medical and adult-use cannabis and its related products, and also exports dried cannabis and cannabis oils to several international markets, including Germany, Israel, and Australia.
On November 8, investment advisory Canaccord maintained a Buy rating on Cronos Group Inc. (NASDAQ:CRON) but lowered the firm's price target on the shares to C$4.75 from C$5. Analyst Matt Bottomley issued the ratings update.
According to Insider Monkey’s data, 8 hedge funds were long Cronos Group Inc. (NASDAQ:CRON) at the end of Q3 2022, compared to 5 funds in the prior quarter. Traci Lerner’s Chescapmanager LLC is the largest stakeholder of the company, with 8.3 million shares worth $23.4 million.
Aurora Cannabis Inc. (NASDAQ:ACB) is headquartered in Edmonton, Canada. The company produces, distributes, and sells cannabis and its derivative products globally, with a focus on Canada. Aurora Cannabis Inc. (NASDAQ:ACB) provides medical and consumer cannabis products and is involved in wholesale medical cannabis distribution in the European Union and various international markets, as well as the distribution of hemp-based CBD products in the United States. The company’s portfolio of cannabis products include dried cannabis, oils, capsules, edibles, and extracts.
On January 4, Aurora Cannabis Inc. (NASDAQ:ACB) announced that it has completed the sale of its Aurora Polaris property for a total of approximately $15 million. Additionally, Aurora Cannabis confirmed that it still expects to achieve adjusted EBITDA profitability in the second fiscal quarter. It has a strong financial position with a net cash balance, boasting approximately $320 million in cash and cash equivalents, including about $63 million in restricted cash.
Stifel analyst W. Andrew Carter on January 27 maintained a Hold rating on Aurora Cannabis Inc. (NASDAQ:ACB) and lowered the firm's price target on the shares to C$1.45 from C$1.75.
According to Insider Monkey’s Q3 data, Aurora Cannabis Inc. (NASDAQ:ACB) was part of 9 hedge fund portfolios, compared to 10 in the last quarter. Jim Simons’ Renaissance Technologies is a significant position holder in the company, with 4.25 million shares worth $5.18 million.
In addition to Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY), elite investors are piling into Aurora Cannabis Inc. (NASDAQ:ACB) for exposure to the marijuana industry.
