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The Best Cannabis Stocks Of 2022

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With the growing acceptance of cannabis among American consumers and their elected representatives, this edgy asset class offers your portfolio an excellent source of growth. According to data from Leafly, an online marijuana marketplace, legal U.S. cannabis sales—medicinal and recreational—increased 35% in 2021, to a total of $24.6 billion.

To help you choose the best cannabis investments, we take a closer look at stocks and funds, as well as a few less dank offerings it’s perhaps better to avoid. There are both pure plays—firms that specialize exclusively in bud—and large-cap names that also have some pot industry exposure.

As always, you should ensure any potential investment choice aligns with your personal goals and risk tolerance. And please note, stocks and funds are listed below in alphabetical order only, by category.

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The Best Pure Play Cannabis Stocks

• Cronos Group (CRON). Canadian marijuana stocks had a brutal year in 2021, with share prices across the group down by double digits. Cronos, which makes a wide variety of adult-use cannabis and CBD products, is no exception. But the company has a big advantage worth considering: Three years ago, U.S. tobacco giant Altria acquired 45% of Cronos in a deal valued at $2.4 billion, and also received an option to buy a controlling stake in the firm. Altria continues to look for ways to diversify its business away from tobacco, and some analysts see the company’s relatively low share price as a reason for Altria to buy the rest of Cronos.

• GrowGeneration (GRWG). Once upon a time, “hydroponics” were for someone growing weed in their basement. Today, they are one of the top cultivation methods for the legal cannabis industry—and GrowGeneration is the leading supplier of hydroponics equipment in the U.S. Offering over 50 retail centers throughout the U.S., GRWG is growing by leaps and bounds. No dividends as of yet, but a P/E ratio above 104 says that growth-oriented investors might find what they’re looking for.

• Urban-Gro (URGO). This B2B company provides the U.S. cannabis industry with “controlled environment cultivation facilities,” otherwise known as marijuana grow houses. If you want to start a cannabis growing operation, Urban-Gro provides fully built-out facilities equipped with everything from air sanitizers to plumbing, and they also help with diagnostic software and staff training. URGO’s market cap is around $122 million as of writing, and over the past five quarters it has seen an average year-over-year revenue growth of 120%.

• Trulieve Cannabis (TCNNF). Shares of this Canadian-traded, U.S.-based cannabis company have lost more than half their value over the last year, in line with the rest of the industry, leaving a market cap of just $4.6 billion. Despite the terrible chart, there’s still a lot to like at Trulieve, starting with 15 consecutive quarters of profitability. Today the company operates nearly 160 dispensaries across 11 states, with a focus on Florida, Pennsylvania and Arizona. In addition, the company has been delivering consistent revenue growth.

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The Best Pure Play Cannabis ETFs

• AdvisorShares Pure US Cannabis ETF (YOLO). Actively managed ETFs are hard to come by, but here’s one for the cannabis sector. If you’re looking to dip a toe into cannabis, this ETF can help you get all the benefits of an actively managed mutual fund with the real-time liquidity of an ETF. A relatively new fund, it invests in mid-cap industry firms in the U.S., Canada, the U.K. and even Israel. As an active ETF, the expense ratio is high, clocking in at 0.76%.

• Amplify Seymour Cannabis ETF (CNBS). Like most of this sector’s ETFs, CNBS is short on history—the fund was launched in 2019—giving investors little to go on for historical performance. Still, inventors can get a taste for the industry without risking a positive drug test at the workplace, as 80% of the fund’s holdings derive at least 50% of their revenue directly from cannabis. Like other ETFs in the cannabis sector, the expense ratio is high at 0.75%.

• The Cannabis ETF (THCX). This passively managed fund tracks the Innovation Labs Cannabis Index, comprised of public companies that produce legal cannabis, hemp and cannabidiol (CBD) products. THCX provides both complete transparency in its holdings and a very well diversified portfolio of marijuana investments, giving investors who want to try the industry on for size an easy entry. Shares do come with a steep expense ratio for a passively managed ETF, at 0.75%.

• Global X Cannabis ETF (POTX). With the lowest expense ratio amongst the ETFs noted in this article, at 0.51%. This passively managed fund outperforms many of the actively managed funds above, making the combination of a lower expense ratio, better performance and a rare dividend yield of around 5% as of writing, a very attractive prospect for those looking to tap into cannabis sector growth.

The Best Large-Cap Stocks with Cannabis Exposure

• Altria Group Inc. (MO). You’ll know this stock best as the maker of Marlboro and one of the behemoths in the tobacco sector (along with its dabblings in the adult beverage industry). Because of that, for ESG investors, Altria’s likely not an option. For those who don’t mind the vice, the company’s making a play for cannabis, holding a substantial stake in Cronos Group, detailed above.

• Constellation Brands, Inc. Class A (STZ). Spirits are Constellation’s main game, but like Altria, this company is diversifying into cannabis via investment in Canopy Growth (CGC), a Canadian cannabis producer. Holding approximately a 36% share of the company, Constellation saw a substantial return on investment in 2020, although 2021 was a big challenge for the partnership. While not a pure cannabis play, this analyst-favorite stock is having a heyday with a three-year return of almost 12% and a dividend yield of 1.3%.

• Scotts Miracle-Gro Co. (SMG). Where does a company best known for plant fertilizers come into the cannabis mix? If you can make backyard plants grow, odds are you can make marijuana grow. For investors looking for the proven track record of a large cap stock with a leg in the growing cannabis industry, Scotts could be a fit. It’s acquired multiple cannabis-adjacent and pure cannabis companies and even built a 50,000 square foot facility for R&D to explore how their fertilizer products impact cannabis growth.

The Best REIT with Cannabis Exposure

• Innovative Industrial Properties Inc. (IIPR). Cannabis has to grow somewhere, and that’s what Innovative Industrial Properties is betting on. This real estate investment trust (REIT) invests in the industrial side of the cannabis industry: greenhouses and other industrial facilities that support cultivation and distribution. With a dividend yield of 3.45%, it’s attractive from an income perspective. For those looking to diversify holdings into real estate, this could be an interesting portfolio addition, especially considering that this REIT has generated a three-year return of over 37%.

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The Bottom Line on Cannabis Stocks

Depending on your personal preference and portfolio needs, there are a wide variety of ways to test cannabis-related holdings in your portfolio. With all emerging industries, investors should be aware of the risks and have an asset allocation and diversification strategy to help absorb inevitable sector volatility.

Top Marijuana Stocks for May 2022

HYFM, AYR.A.CX, IIPR are top for value, growth, and performance, respectively

Matthew Johnston has more than 5 years writing content for Investopedia. He is an expert on company news, market news, political news, trading news, investing, and the economy. He received his bachelor’s degree in interdisciplinary studies from St. Stephen’s University and his master’s degree in economics at The New School for Social Research. He teaches macroeconomics at St. Stephen’s University.

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., Cronos Group Inc., and Tilray Inc. Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.

Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -56.1% over the past 12 months, well below the Russell 1000’s total return of 6.4%. These market performance numbers and all statistics in the tables below are as of April 19, 2022.

Below we look at the top five marijuana stocks with the best value, the fastest growth, and the best performance.

Best Value Marijuana Stocks

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.

Best Value Marijuana Stocks
Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Hydrofarm Holdings Group Inc. (HYFM) 12.15 0.5 1.1
GrowGeneration Corp. (GRWG) 7.66 0.5 1.1
Village Farms International Inc. (VFF) 4.52 0.4 1.4
Ayr Wellness Inc. (AYR.A.CX) CA$12.62 CA$0.8 1.6
Cresco Labs Inc. (CL.CX) CA$6.98 CA$2.0 1.8
  • Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group is a holding company that, through its subsidiaries, makes and distributes hydroponic products to customers throughout the U.S., Canada, and Europe. The company offers hundreds of brands. It has a total of nine distribution centers, offering a product line of more than 5,000 items.
  • GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products and one of the largest hydroponics suppliers in the country, operating retail hydroponic and organic specialty gardening retail outlets. Though GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. It sells thousands of products, including plant nutrients, farming soils, advanced lighting technology, and hydroponic and aquaponic equipment. It owns and operates 63 retail and distribution centers.
  • Village Farms International Inc.: Village Farms International is a Canada-based vertically integrated greenhouse produce company. The company produces cannabis in addition to growing, producing, and distributing fresh produce to national grocers in North America. The company’s brands include: Village Farms Fresh, a vertically integrated greenhouse grower; Pure Sunfarms, a cannabis producer; ROSE LifeScience, a cannabis producer and distributor; Balanced Health Botanicals, a CBD brand with an e-commerce platform; Village Fields Hemp, a hemp grower; and VF Clean Energy, a subsidiary that converts landfill gas to clean energy.
  • Ayr Wellness Inc.: Ayr Wellness is a cannabis company involved in the cultivation, manufacturing, and dispensing of cannabis and cannabis-derived products. The company’s product portfolio includes flowers, seltzers and tinctures, edibles and vape products under brands including Kynd, Origyn, Stix Preroll Co., Levia, Road Tripper, Entourage, Haze, Wicked, Secret Orchard, and Cannapunch. Ayr Wellness also trades over the counter (OTC) in the U.S. under the ticker AYRWF. The company announced in mid-February that it has completed its acquisition of Cultivauna LLC, owner of Levia-branded cannabis infused seltzers and water-soluble tinctures, for $20 million in upfront consideration. Under the terms of the transaction, which was first announced in September 2021, an earnout payment of up to an additional $40 million will be paid in shares depending on whether certain revenue targets in 2022 and 2023 are achieved.
  • Cresco Labs Inc.: Cresco Labs grows, manufactures, distributes, and packages cannabis products. The company operates in 10 states, including production facilities and dispensaries. Its brands include Cresco, Reserve, Remedi, High Supply, Wonder Wellness Co., Mindy’s, Good News, Sunnyside, and FloraCal Farms. Cresco Labs’ stock also trades OTC in the U.S. under the ticker CRLBF. The company announced in late March that it has agreed to acquire Columbia Care Inc., a cultivator and manufacturer of cannabis products and related services, for approximately $2.0 billion. The transaction is expected to close in the fourth quarter of 2022.

Fastest Growing Marijuana Stocks

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.

Fastest Growing Marijuana Stocks
Price ($) Market Cap ($B) Revenue Growth (%)
Ayr Wellness Inc. (AYR.A.CX) CA$12.62 CA$0.8 126.3
OrganiGram Holdings Inc. (OGI) 1.60 0.5 118.0
Verano Holdings Corp. (VRNO.CX) CA$10.70 CA$2.2 106.0
Jushi Holdings Inc. (JUSH.CX) CA$3.60 CA$0.7 104.9
Trulieve Cannabis Corp. (TRUL.CX) CA$22.96 CA$4.2 75.3
  • Ayr Wellness Inc.: See above for company description.
  • OrganiGram Holdings Inc.: OrganiGram Holdings is a Canada-based producer of medical and recreational cannabis focused on producing high-quality, indoor-grown cannabis. It is the parent company of Organigram Inc., a producer of cannabis products, and The Edibles and Infusions Corp., a cannabis-infused, soft-chew and confectionary manufacturer. Its brands include The Edison Cannabis Co., Indi, Bag o’ Buds, SHRED, and Trailblazer. OrganiGram’s stock also trades in Canada on the TSX under the ticker OGI.TO. On April 12, the company reported results for Q2 of its 2022 fiscal year (FY), the three-month period ended Feb. 28, 2022. The company said its net loss narrowed dramatically to $4.0 million from $66.4 million as net revenue more than doubled. OrganiGram Holdings said it grew its market share among Canadian licensed producers to 8.2% in February, and remained the top market share spot in dried flower.
  • Verano Holdings Corp.: Verano Holdings is a vertically integrated, multistate cannabis operator. The company produces a wide range of medical and adult-use cannabis products, which it sells through its portfolio of brands, including: Verano, Avexia, Encore, and MÜV. It owns and operates 15 cultivation facilities and 113 retail locations in a number of states throughout the U.S. (the number of cultivation facilities and retail locations includes those operated and owned by two pending acquisitions). The company’s stock also trades OTC in the U.S. under the ticker VRNOF. Verano announced in early February that it has agreed to acquire Goodness Growth Holdings Inc., a holding company whose subsidiaries include Vireo Health, a multistate cannabis company, and Resurgent Biosciences Inc., a science and intellectual property incubator. The deal gives Verano Holdings access to the New York, New Mexico, and Minnesota markets. The all-share transaction is valued at approximately $413 million. Verano Holdings did not say when the transaction is expected to be completed.
  • Jushi Holdings Inc.: Jushi Holdings is a holding company focused on branded cannabis and hemp-based assets. The company is engaged in retail, distribution, cultivation, and processing operations. Its brands include: The Bank, focused on plant genetics and cultivation; The Lab, specializing in vape products and concentrates; Nira, a maker of hemp-based CBD products that are physician formulated; Nira+, a producer of medicinal THC products; Sèche, which offers various branded ground and flower cannabis products; and Tasteology, a provider of THC-infused products. Jushi also trades OTC in the U.S. under the ticker JUSHF. The company announced in early April that it has closed its acquisition of NuLeaf Inc. for $53.6 million. NuLeaf owns three medical retail dispensaries, a cultivation facility, and a processing facility in Nevada.
  • Trulieve Cannabis Corp.: Trulieve Cannabis is a vertically integrated cannabis company and multi-state operator. The company operates across 11 states, with leading market positions in Arizona, Florida, and Pennsylvania. It operates a variety of cannabis brands, including the Cultivar Collection, Muse, Blue River, Trulieve Core, Sweet Talk, and Momenta. Trulieve also trades OTC in the U.S. under the ticker TCNNF. The company announced in mid-February that it has completed its acquisition of a 64,000 square foot cultivation facility in Phoenix for upfront consideration of $13.8 million. The transaction includes potential milestone payments that are subject to earnout and escrow requirements.

Marijuana Stocks with the Best Performance

Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that 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 marijuana stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.

Marijuana Stocks with the Best Performance
Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Innovative Industrial Properties Inc. (IIPR) 164.32 4.2 -6.5
Green Thumb Industries Inc. (GTII.CX) CA$21.00 CA$4.9 -38.1
OrganiGram Holdings Inc. (OGI) 1.60 0.5 -38.5
Sundial Growers Inc. (SNDL) 0.56 1.1 -40.8
4Front Ventures Corp. (FFNT.CX) CA$0.90 CA$0.6 -42.3
Russell 1000 N/A N/A 6.4
ETFMG Alternative Harvest ETF (MJ) N/A N/A -56.1
  • Innovative Industrial Properties Inc.: Innovative Industrial Properties (IIP) is a real estate investment trust (REIT) that engages in the acquisition, disposition, development, and management of industrial facilities leased to tenants in the regulated cannabis industry. The company’s portfolio consists of specialized industrial and greenhouse buildings leased to state-licensed cannabis operators across the U.S. IIP announced in mid-April that it has acquired a Maryland property consisting of approximately 84,000 square feet of industrial and greenhouse space for $25.0 million. With the closing of the transaction, the company also entered into a long-term, triple-net lease agreement for the property with a subsidiary of Maryland Cultivation and Processing LLC. The subsidiary plans to continue operating the property as a regulated cannabis cultivation facility.
  • Green Thumb Industries Inc.: Green Thumb Industries is a consumer-packaged cannabis products company and retailer. It manufactures and distributes a variety of branded cannabis products through its portfolio of brands, including Beboe, Dogwalkers, Dr. Solomon’s, Good Green, incredibles and RYTHM. The company also owns and operates retail cannabis stores called Rise. Green Thumb has 17 manufacturing facilities and scores of retail locations, with operations across 15 U.S. markets. The company’s stock also trades OTC in the U.S. under the ticker GTBIF.
  • OrganiGram Holdings Inc.: See above for company description.
  • Sundial Growers Inc.: Sundial Growers is a Canada-based diversified cannabis company engaged in the cultivation, manufacturing and processing, and retailing of various cannabis products. The company focuses on inhalables for the Canadian adult-use market. Its branded products are available in flower, vape, pre-roll, and other forms. The company’s brands include Sundial, Top Leaf, Palmetto, and Grasslands. Sundial Growers announced in late March that it has completed its acquisition of Alcanna Inc. for CA$320 million ($256 million). Alcanna is one of the largest retailers of alcohol in North America and it also has a majority ownership of Nova Cannabis, which operates 78 cannabis retail stores in Canada.
  • 4Front Ventures Corp.: 4Front Ventures owns and operates cannabis cultivation and production facilities. It cultivates marijuana, produces cannabis flower, edibles, and oil-based products, and distributes its products via medical dispensaries or adult-use stores. The company owns and operates production and retail facilities across five U.S. states. It produces more than 32 tons of cannabis per year and owns over 20 brands offering more than 1,800 unique product lines. 4Front’s stock also trades OTC in the U.S. under the ticker FFNTF. The company announced in late March that it has agreed to acquire Island Cannabis Co., a producer of pre-rolls, flower, and concentrate products. Financial terms of the transaction were not disclosed.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.