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 the 2020 U.S. presidential election.
Nasdaq-listed marijuana companies include Tilray Brands Inc., Organigram Holdings Inc., and GrowGeneration Corp. Many of these companies managed to maintain fast revenue growth in spite of the massive disruptions caused by the COVID-19 pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), an exchange-traded fund, have significantly underperformed the broader market. MJ has provided a total return of -58.1% over the past 12 months, well below the benchmark Russell 1000 Index’s total return of 4.4%. These performance figures and all statistics in the tables below are as of April 21, 2022.
Here are the top three marijuana stocks on the Nasdaq with the best value, fastest growth, and best performance.
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 eventually could 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 ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/S Ratio | |
| GrowGeneration Corp. (GRWG) | 6.60 | 0.4 | 1.0 |
| Hydrofarm Holdings Group Inc. (HYFM) | 10.79 | 0.5 | 1.0 |
| Village Farms International Inc. (VFF) | 4.29 | 0.4 | 1.4 |
Source: YCharts
- 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. Though GrowGeneration is not a pure play cannabis company, many of its products are used in cannabis cultivation. On March 1, the company announced earnings results for Q4 2021, ended Dec. 31. For that quarter, GrowGeneration reported net loss of $4.1 million compared with net income in the prior-year quarter, as well as 46.3% sales growth year-over-year (YOY). The company said a persistently difficult macro environment negatively impacted results. Same-store sales at 26 locations declined 12.3% during the quarter compared to the previous year.
- Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group is a manufacturer and distributor of hydroponics equipment and supplies for controlled environment agriculture, including for the cannabis industry. Its products include high-intensity grow lights, climate control solutions, growing media, and more.
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing vegetables such as tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. Village Farms reported Q4 2021 results for the period ended Dec. 31 on March 1. Net income attributable to shareholders fell by 70.4% even as revenue showed solid growth YOY. Revenue performance was driven by the company’s Canadian cannabis operations.
These are the marijuana stocks on the Nasdaq with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
| Fastest-Growing Marijuana Stocks on the Nasdaq | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | Revenue Growth (%) | |
| Organigram Holdings Inc. (OGI) | 1.46 | 0.5 | 118.0 |
| Village Farms International Inc. (VFF) | 4.29 | 0.4 | 53.7 |
| Cronos Group Inc. (CRON) | 3.06 | 1.2 | 51.3 |
Source: YCharts
- Organigram Holdings Inc.: Organigram Holdings’ wholly owned subsidiary, Organigram Inc., is a Canada-based producer of medical and recreational cannabis. Its major focus is producing indoor-grown cannabis. Organigram reported results for Q2 FY 2022, ended Feb. 28, on April 12. For the quarter, the company reported dramatically narrowing net losses as revenue more than doubled YOY. The growth in revenue was driven largely by an increase in adult-use recreational revenue and international revenue.
- Village Farms International Inc.: See above for company description.
- Cronos Group Inc.: Cronos Group is a vertically integrated cannabis company with distribution across five continents. It distributes medical marijuana and cultivates cannabis oil. Cronos Group’s portfolio includes a global wellness platform, adult-use brands, and multiple hemp-derived cannabidiol (CBD) brands.
These are the marijuana stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.
| Marijuana Stocks on the Nasdaq with the Best Performance | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Organigram Holdings Inc. (OGI) | 1.46 | 0.5 | -40.4 |
| Sundial Growers Inc. (SNDL) | 0.52 | 1.0 | -41.8 |
| Village Farms International Inc. (VFF) | 4.29 | 0.4 | -61.1 |
| Russell 1000 | N/A | N/A | 4.4 |
| ETFMG Alternative Harvest ETF (MJ) | N/A | N/A | -58.1 |
Source: YCharts
- Organigram Holdings Inc.: See above for company description.
- Sundial Growers Inc.: Sundial Growers is a Canada-based cannabis producer. The company produces and distributes cannabis for the adult-use and medical market. It offers dried flower cannabis products in various formats, including pre-rolls, oils, capsules, and more. On April 13, Sundial announced that its external auditor informed the company that it now plans to finish its audit, and by about April 29 will release its audit opinion and report on the Sundial’s consolidated financial statements for the year ended December 31, 2021. The audit has experienced delays. The year 2021 is the first year that the company is required to have an auditor attestation report on its internal financial controls under a section of the Sarbanes-Oxley Act.
- Village Farms International Inc.: See above for company description.
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