VFF is top for value and GRWG is top for growth and momentum
The marijuana industry consists of companies directly related to the research, development, and distribution of cannabis products, as well as companies that indirectly support these operations. Traditional stock market indices such as the Nasdaq continue to include more companies from the marijuana industry as a growing number of regions around the world legalize marijuana. The number of U.S. states that permit marijuana use in some form increased to 36 after voters in several states approved marijuana legalization initiatives on their ballots in last year’s U.S. presidential election. Some of the Nasdaq-listed marijuana companies include Tilray Inc. (TLRY) and OrganiGram Holdings Inc. (OGI). Many of these companies have managed to maintain revenue growth in spite of the COVID-19 pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have outperformed the broader market. MJ has provided a total return of 40.0% over the past 12 months, above the Russell 1000’s total return of 37.5%. These performance figures and all statistics in the tables below are as of July 21, 2021.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.
On March 31, 2021, New York passed a law legalizing recreational cannabis, expanding medical use, and decriminalizing possession of small amounts of marijuana, among other measures. Not all of these provisions will go into effect immediately and there is no timeline yet of a date by which all these measures will be fully implemented.
These are the marijuana stocks trading on the Nasdaq exchange 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.
|Best Value Marijuana Stocks on the Nasdaq|
|Price ($)||Market Cap ($B)||12-Month Trailing P/S Ratio|
|Village Farms International Inc. (VFF)||9.96||0.8||3.5|
|Hydrofarm Holdings Group Inc. (HYFM)||50.23||2.0||3.9|
|Aurora Cannabis Inc. (ACB)||7.52||1.5||5.5|
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing vegetables such as tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. On July 1, Village Farms announced that its cannabis subsidiary Pure Sunfarms will be able to increase production by 50% at its 1.1 million square-foot Delta 2 greenhouse facility. The increased production capability is due to an amendment to its cultivation license made by regulator Health Canada.
- Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group manufactures and distributes hydroponics products, including lighting equipment, climate control devices, garden accessories, and related products. The company announced on July 1 that it had completed its previously-announced acquisition of Aurora, a maker of organic hydroponic products. The transaction is valued at $161 million.
- Aurora Cannabis Inc.: Aurora Cannabis is a Canada-based, vertically-integrated producer and distributor of medical cannabis. It engages in cannabis facility engineering, cannabis breeding and genetics research, cannabis and hemp production, and more.
These are the marijuana stocks on the Nasdaq with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
|Fastest Growing Marijuana Stocks on the Nasdaq|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|GrowGeneration Corp. (GRWG)||41.69||2.5||172.9|
|Village Farms International Inc. (VFF)||9.96||0.8||63.2|
|Cronos Group Inc. (CRON)||7.43||2.8||49.6|
- GrowGeneration Corp.: GrowGeneration operates retail hydroponic and organic specialty gardening retail outlets. It offers plant nutrition, farming soils, crops, advanced lighting technology, hydroponic and aquaponic equipment, and more. While GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. In late July, the company announced two acquisitions of hydroponic garden centers. The first is Aqua Serene, an Oregon-based company with annual revenue of more than $14 million. The second acquisition was Mendocino Greenhouse and Garden Supply, a California-based company with annual sales greater than $8 million. The two acquisitions bring the number of GrowGeneration locations nationwide to 58. Terms of both deals were not disclosed.
- Village Farms International Inc.: See above for company description.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company focused on research, technology, and the production and distribution of medical cannabis products and cannabis oils.
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
|Marijuana Stocks on the Nasdaq with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GrowGeneration Corp. (GRWG)||41.69||2.5||431.8|
|Tilray Inc. (TLRY)||14.60||3.9||179.2|
|OrganiGram Holdings Inc. (OGI)||2.62||0.8||89.9|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||40.0|
- GrowGeneration Corp.: See above for company description.
- Tilray Inc.: Tilray is a Canada-based supplier of cannabis products to pharmaceutical distributors. The company is focused on cannabis research, cultivation, processing, and distribution of cannabis products. On May 3, Tilray announced the closing of its previously announced merger with Aphria Inc., creating the new Tilray company.
- OrganiGram Holdings Inc.: Canada-based OrganiGram Holdings is a licensed producer of medical marijuana, which it produces through a subsidiary. For Q3 FY 2021, ended May 31, OrganiGram reported a dramatically narrowing net loss YOY on a 12.8% YOY increase in net revenue. OrganiGram attributed the results to factors including the growing number of company cannabis retail stores, and store re-openings after the COVID-19 pandemic.
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