The 12 Best Cannabis Stocks to Buy in 2023
As the marijuana industry continues to grow, keen investors are looking for opportunities to expand their portfolio. Cannabis and its subsequent products are fully or partially legalized in 46 US states, thus increasing the number of businesses entering the market.
If you’re looking at marijuana stocks, you might think that they’re limited to retail organizations. But if you look closer, you’ll see that the best cannabis stocks in 2023 will come from many different areas, such as cultivation, research, and distribution.
The volatility of the market for publicly traded cannabis companies is something to be aware of since it is still technically a Schedule 1 drug, according to the federal government. If you’re going to invest, you’ll need to do thorough research on the company to ensure they are compliant with all laws.
The Best Marijuana Stocks to Buy in 2023
Cannabis stocks can be hard to understand because there are a lot of nuances to keep in mind, especially when it comes to legalization laws. Here is a quick overview of the top cannabis stocks to buy in 2023.
|Curaleaf Holdings Inc. (OTCMKTS: CURLF)||Marijuana Grower and Retailer|
|Cresco Labs Inc. (OTCMKTS: CRLBF)||Marijuana Grower and Retailer|
|Green Thumb Industries Inc. (OTCMKTS: GTBIF)||Marijuana Grower and Retailer|
|WM Technology Inc. (NASDAQ: MAPS)||Technology Company/Ancillary|
|Organigram Holdings Inc. (NASDAQ: OGI)||Marijuana Grower and Retailer|
|Aurora Cannabis Inc. (NASDAQ: ACB)||Marijuana Grower and Retailer|
|Village Farms International Inc. (NASDAQ: VFF)||Marijuana Grower and Retailer|
|Clever Leaves Holdings Inc. (NASDAQ: CLVR)||Marijuana Grower and REtailer|
|Verano Holdings Corp (OTCMKTS: VRNOF)||Marijuana Grower and Retailer|
|Trulieve Cannabis Corp (OTCMKTS: TCNNF)||Marijuana Grower and Retailer|
|Scotts Miracle-Gro Co (NYSE: SMG)||Ancillary Provider|
|Jazz Pharmaceuticals PLC (NASDAQ: JAZZ)||Biotech Company|
These companies are the best bet for investing in a volatile market, as they have long-term plans and are well positioned to expand when the US markets open up with further legalization.
Curaleaf Holdings Inc.
The key to success is expansion, and once federal cannabis legalization reform happens, a company like Curaleaf Holdings will be in a great position. This is largely due to it being a multistate operator (MSO).
The company currently owns 140+ dispensaries and over 29 cultivation sites all over the United States and is one of the largest cannabis companies in the country.
Its market cap is $2.8 billion, making it among the most profitable MSOs out there. The company announced its fourth-quarter results, which included $339.73 million in revenue and a 7% increase in revenue over the previous year.
On the list of best cannabis stocks in 2023, Curaleaf Holdings is a no-brainer since they are already poised to expand even further over the next few years.
Cresco Labs Inc.
Cresco Labs is another United States MSO that works in 10 states with more than 20 production facilities and over 50 dispensaries. At the moment, they have locations in Virginia, Colorado, and Pennsylvania, and they plan to open three more dispensaries in Florida.
Its current market cap is $748.98 million, placing it among the best weed stocks to buy. They are also well positioned to move into more markets as the government looks to overhaul their legislature.
The interesting thing about this company is that even though they reported slow growth last year, they actually gained share in every market aside from California. There are stock options for states that are going to legalize marijuana.
Green Thumb Industries Inc.
Green Thumb Industries is an MSO that currently has a presence in 15 different markets. With 77 retail stores and 17 manufacturing operations, it’s no surprise that it has been more profitable than others on the market.
The company currently has a market cap of $1.945 billion. Legalizing cannabis for recreational use in Rhode Island, New York, and Virginia will help Green Thumb Industries grow in the long run.
In the third quarter of 2022, Green Thumb Industries generated over $9 million in net income, with total cannabis sales growing 12% over the previous year. It’s also one of the good cannabis stocks to invest in because Green Thumb Industries is currently looking for good markets to expand into.
WM Technology Inc.
WM Tech is an interesting player in the cannabis industry because they don’t sell goods directly to customers. Instead, they run an online marketplace for cannabis, give cannabis businesses compliance software, and even have an e-commerce platform. And because they do not come into contact with the cannabis plant, they can list on exchanges like NASDAQ.
Sales growth has slowed down, mostly because of price increases and working in markets that are already full. While there is potential in this stock, the company needs to be more transparent in order for people to consider it in weaker times.
Market capitalization for WM Technology is currently $133 million, and it has added over 1000 new monthly paying clients over the prior year’s third quarter. If you’re looking for a sleeper stock with incredible growth potential in a niche market, check out this company.
Organigram Holdings Inc.
A Canadian company that is licensed to grow cannabis and is also very active in the cannabis-infused edibles scene. Organigram is interesting because it keeps getting a bigger share of the market. As long as this keeps happening, it would be one of the top weed stocks to consider.
Organigram is financially supported by British American Tobacco PLC (BTI), putting them in a more stable position. As uncertainty flows throughout the cannabis industry, it could be a steady rock to hold onto. The current market cap is $279 million, and the shares are under $1.
Aurora Cannabis Inc.
Aurora currently operates in the United States and Canada, with plans to expand into the German market. In May 2022, the company received the EU GMP (Good Manufacturing Practice) certificate, which allows them to start a medical cannabis production operation within the country.
They are one of a kind because they are vertically integrated and offer a wide range of services, such as building facilities and breeding cannabis. If you’re interested in hemp stocks, they also specialize in hemp production and retail distribution.
Rapidly developing markets will often lead to volatile marijuana stocks, which is why revenues were a little turbulent throughout this first quarter. This stock is so appealing because it has a big presence in other countries, which is important for long-term growth as markets get older.
Aurora Cannabis is worth $366 million on the stock market right now, and its net sales have reached $175 million. When they first launched their initial public offering (IPO), they didn’t make much money. The listing instead gave Aurora a lot of exposure south of Canada, which has steadily been climbing since 2018.
Village Farms International Inc.
Village Farms produces cannabis but also fruits and vegetables in Texas, Mexico, and Canada. Over 50% of their revenue comes directly from these sales. One reason they are a viable option for long term investments is the fact that they own their own CBD brand in the United States, called Balanced Health Botanicals, a potentially good CBD stock to invest in.
Their market cap is $110 million. They are currently worth $1.18, and they just bought a big licensed producer in Canada called Pure Sunfarms. Purchasing these marijuana stocks while they are under $15 will be a wise move as we move further into 2023.
Clever Leaves Holdings Inc.
Clever Leaves is a global competitor in the cannabis production market, with cultivation and processing operating in Colombia and Portugal. It also has a large distribution program in Europe, specifically Germany.
Its market cap is $26 million, and it is currently trading at $0.56. Once the US market opens up for their nutraceuticals business, Clever Leaves will provide an excellent distribution network for their products. If you want exposure to the cannabis market, this is a low-market-cap option to choose in a fast-paced environment.
Verano Holdings Corp
Verano Holdings is an MSO that deals with recreational and medical cannabis products. They own 14 cultivation facilities and over 120 dispensaries. They have a market cap of $1.05 billion and are currently trading at just over $3 per stock.
The opening of their 63rd dispensary in the state of Florida shows that this company will be around for a long time. As long as market demand returns, this company should have no trouble recovering from a flat 2022.
Trulieve Cannabis Corp
Trulieve Cannab is primarily focused in Florida; they have taken over the medical cannabis market in the state. In addition, it has high positions in states like Pennsylvania and Arizona, with a presence in 11 states.
Hopefully the market matures in the future, as their current markets are sub-par for growth currently. As long as the renewed push for cannabis is happening in Florida, the extremely well-performing company’s market share will skyrocket. They currently hold a market cap of $1.24 billion and are currently trading at $6.95.
Scotts Miracle-Gro Co
This is another company that doesn’t violate any federal laws since they don’t touch cannabis, which means it can trade on the New York Stock Exchange (NYSE). Hawthorne Gardening, which is their biggest subsidiary, is a big supplier of hydroponic growing equipment for cannabis growers. As hydroponics becomes mainstream, this company will see the long-term growth that it needs.
Although they are generating a lot of income from Hawthorn Gardening, this company still produces a lot of revenue from their lawn and garden products, such as fertilizer and pesticides.
Their market cap is currently at $4.654 billion, with a trading value of $84.87. Once there is reform at the federal level and the regulatory setbacks can be avoided, they should see an increase in longevity and a rise in their marijuana stocks.
Jazz Pharmaceuticals PLC
An interesting competitor in the cannabis market, Jazz Pharmaceuticals is an Ireland-based company that recently purchased GW Pharmaceutical and, with it, a cannabis-based drug called Epidiolex that is the first to be approved by the Food and Drug Administration (FDA). This drug treats epilepsy in children and other rare diseases, and it generated over $650 million in sales in 2021.
The company has a market cap of $9.847 billion and a current trading price of $156.37. As Jazz Pharmaceuticals continues to flesh out its Nabixomal drug, which failed to meet its endpoint, it’ll show the same commercial success as its previous cannabis-related drug.
Overview of the Marijuana Industry
When investing in marijuana stocks, there’s always a chance that cannabis companies can get scooped up and purchased by bigger conglomerates. Over the past few years, a few bigger companies have pushed out smaller ones and grown a lot as a result.
Aside from sales of cannabis for medical and recreational use, the best marijuana stocks have untapped potential that can be found by looking at a few key factors. These can include things like:
- How long they have been in the market for;
- The presence they have in their current markets (i.e. closest competition);
- Company’s market cap and how much cash they have on the balance sheet;
- Whether medical and recreational use of cannabis is legal in the state they operate in.
Let’s dive a little deeper and analyze these factors in more detail.
Medical and Recreational Marijuana
Patients use cannabis for different reasons than recreational marijuana users. Also, patients who want to use cannabis to treat a medical condition need a prescription from their doctor. Recreational cannabis is consumed for the sole purpose of joy and relaxation. This does not require a license, and the person has to be of legal age to purchase it.
Many countries have legalized medical marijuana rather than recreational marijuana, making it difficult to navigate the landscape depending on the business. This kind of uncertainty can deeply affect the long-term gains of marijuana stocks.
For example, the United States may have individual states legalizing weed, but it’s still illegal to have it at the federal level. There have been talks going around about decriminalizing cannabis in the U.S., which could help markets grow.
Canadian cannabis is fully legalized, yet they are seeing slow growth across all markets. This is because the supply of cannabis products is higher than the demand, which causes prices to go down and less money to be made.
Depending on the vertical, there are a few major categories when you buy marijuana stocks:
- Cultivators grow, package, and sell the products to consumers. With cultivation, you will find Canadian marijuana stocks trading in both the U.S. and Canadian stock markets.
- Cannabis businesses provide services to cannabis companies but don’t interact with the plant. They can bypass a lot of the regulatory obstacles that cannabis companies face.
- Pharmaceutical companies use cannabis in their drugs to help with various conditions. These are biotech companies looking to fuse natural ingredients with synthetic compounds to create less harsh medications.
It’s important to know everything about a company you want to invest in because their focus can change based on many factors, most notably the passing of new laws.
How to Invest in Marijuana Stocks?
In order to start investing in cannabis, you’re going to have to open a brokerage account; otherwise, you won’t be able to access the market.
The next steps for all potential cannabis investors are research and risk assessment, which help narrow down the options. When that’s done, you can then fund the account, search for the stock(s), and start purchasing.
As you go through the process, you’ll quickly see that, like on other weed stocks, there is a bid-as spread. The price will be outlined on the order page when you enter the number of shares you want to purchase or the specific amount of money you want to spend. Before you buy cannabis stocks, review your order a few times to make sure you are making the right choice.
Risks of Buying Cannabis Stocks
All marijuana stocks have risks associated with them, and you want to invest in a company where you don’t have to touch the money for at least 5 years. There is an inherent risk to investing all of your money in US cannabis stocks since the market is highly volatile.
In the United States, fluctuations in marijuana stocks are based on several factors, including:
- Which state has legalized marijuana both medically and recreationally.
- Whether a company will be merged with another or if it will go under.
- The current landscape of supply and demand.
Research the company you are investing in, how they make their money, and their long-term investments.
Diversifying your portfolio is the key to success. In essence, make sure that no more than 10–15 percent of your portfolio is in the cannabis industry.
Pot stocks have potential that is yet to be tapped into. Yet, the volatility makes the cannabis industry difficult to navigate. Unless you are a seasoned investor, take your time before buying stocks. Hopefully, this guide has given you an idea of which marijuana companies to invest in 2023.
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