As with any nascent industry, there are also plenty of investment risks. Whether you're a first-time investor or a seasoned veteran, it pays to understand ඣhow this industry works. This guide will get you up to speed quickly and includes our picks for the top 🧸marijuana stocks.
Best marijuana stocks in 2024
Best marijuana stocks for 2024
Company | Description |
---|---|
Green Thumb Industries (billion casino royal:OTC:GTBIF) | Marijuana grower and retailer |
Cresco Labs (billion casino royal:OTC:CRLBF) | Marijuana grower and retailer |
Innovative Industrial Properties (billion casino royal:NYSE:IIPR) | Ancillary provider |
GrowGeneration (billion casino royal:NASDAQ:GRWG) | Ancillary provider |
Scotts Miracle-Gro (NYSE:SMG) | Ancillary provider |
Jazz Pharmaceuticals (billion casino royal:NASDAQ:JAZZ) | Biotech company |
1. Green Thumb Industries
1. Green Thumb Industries
The company has been profitable on an annual basis since 2020. It continues to deliver revenue growth and maintains a strong billion casino royal:balance sheet even with macroeconomic and cannabis industry headwinds. Green Thumb should have plenty of 𝓰growth potential over the long term as the U.S. cannabis market expands.
For now, Green Thumb's shares can only be bought and sold on bil𝓰lion casino royal:over-the-counter (OTC) markets in the U.S. But if federal cannabis restrictions are lifted, the stock could be listed on major U.S. billion casino royal:stock exchanges. This would almost certainly be a hꦰuge catalyst for Green Thumb.
billion casino royal: Over-the-Counter (OTC)
2. Cresco Labs
2. Cresco Labs
3. Innovative Industrial Properties
3. Innovative Industrial Properties
U.S. cannabis companies can't easily secure capital from banks or financial institutions since marijuana remains illegal at the federal level. Innovative Industrial Properties (IIP) helps to solve the cash sho🔯rtage for growing marijuana companies. It buys properties owned by U.S. medical cannabis operators and leases the properties back to them. The sale to IIP provides the cannabis operator with much-needed cash, and the lease agreements create a steady revenue stream for IIP.
Innovative Industrial Properties has grown significantly in recent years and now owns properties in 19 states. The company continues to generate strong revenue and earnings growth powered by its billion casino royal:sale-leaseback business model, even with some of its tenants facing financial challenges. Because IIP is organized as a billion casino royal:real estate investment trust (REIT), it returns at least 90% of its billion casino royal:taxable income to shareholders.
In some ways, IIP wouldn't be helped as much by federal cannabis reform as other companies. Its shares already trade on the New York Stock Exchange (NYSE). If ♕traditional banking services weඣre available to U.S. cannabis operators, IIP could face increased competition. However, federal reforms would likely cause the U.S. cannabis market to expand -- which should work in IIP's favor.
billion casino royal: Revenue
4. GrowGeneration
4. GrowGeneration
GrowGeneration is another ancillary provider and the largest specialty retail chain focused on the cannabis market. It operates more than 60 stores in 18 states. Because the company's business doesn't violate any existing federal marijuana laws, its stock can trade on the billion casino royal:Nasdaq stock exchange without any issues.
Demand for the company's billion casino royal:hydroponics products has fallen due to an oversupply of cannabis in the U.S. This has cause🅰d short-term headwinds for GrowGeneration that are likely to continue in 2024. However, the company's long-term prospects remain bright, and GrowGeneration should ⛄be in a position to significantly rebound when market conditions improve.
5. ScottsMiracle-Gro
5. ScottsMiracle-Gro
ScottsMiracle-Gro is facing the same billion casino royal:supply-and-demand mark♊et dynamics as GrowGeneration. Like GrowGeneration, its shares can be traded on a major stock exchange (in this case, the NYSEඣ) since Sco♕tts doesn't violate any federal marijuana laws.
The company's Hawthorne Gardening subsidiary ranks as a leading supplier of hydroponic gardening products to the cannabis industry. Hawthorne should have a significant growth runway over the long term despite some near-term challenges.Although Hawthorne Gardening has been a primary growth driver for Scotts, the company still generates the majority of its total revenue from consumer lawn and garden products. Higher billion casino royal:commodity prices are currently squeezing margins for the b👍usiness. However, the company's consumer lawn and garden products provide a relatively steady counterbalance to its cannabis supply 🅷unit.
6. Jazz Pharmaceuticals
6. Jazz Pharmaceuticals
Overview
Marijuana stocks overview
Let’s cover some of the basics you need to know before investing in marijuana stocks.- The marijuana industry is divided into three broad categories. Marijuana growers and retailers cultivate and package cannabis products and sell them to consumers. billion casino royal:Biotechnology companies develop and market cannabis-based pharmaceutical drugs. Ancillary marijuana businesses provide products and services to cannabis companies without touching the plant.
- Cannabis can be medical or recreational. Medical cannabis patients use cannabis or cannabis extracts to treat health conditions and have recommendations or cannabis prescriptions from physicians. Recreational cannabis users purchase marijuana or cannabis extracts purely for enjoyment and must be 18 or older and living in a jurisdiction where recreational use of the plant is legal.
- Geography matters. Medical cannabis is legal in many more countries than recreational cannabis. In the U.S., cannabis remains illegal at the federal level. However, billion casino royal:a growing number of states have legalized medical and/or recreational cannabis. And -- as mentioned earlier -- the Biden administration is taking some steps that could lead to federal decriminalization of marijuana. The rapid growth of the U.S. cannabis market is translating into impressive growth by U.S.-based cannabis companies, while marijuana companies in Canada -- where the plant is already fully legal nationwide -- are expanding more slowly. Canada is one of the global legal markets where supply is outpacing demand and leading to falling cannabis prices.
However, not all cannabis companies fared well in the pandemic. Recreational cannabis retailers in billion casino royal:tourist destinations such as Las Vegas saw their customer traffic dwindle, causing some dispensaries to start focusing on home delivery. In the medical segment, people delayed doctor visits, causing new patient starts to drop. Biotech companies exꦰperienced logistical challenges that affected sales and research progress.
Related investing topics
Should you buy marijuana stocks?
Just because there's a trendy new sector with lots of press and potential growth doesn't mean you need to invest in it. If you buy broad-based billion casino royal:index funds, you're covered no matter which sectors of the stock market do well. Conservative investors who prefer lower risk are likely better off avoiding billion casino royal:investing in marijuana sto♒cks.
Several of the marijuana stocks mentioned above have fallen significantly over the past 12 months. This pattern underscores the risks that investors face and highlights why billion casino royal:using margin to buy these stocks should be avoided. However, the factors causing poor pe♔rformance (especially a supply-demand imbalance) should be resolved over time.