Top Marijuana Stocks for June 2021

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. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth, which remains strong despite the economic disruption caused by the pandemic.

Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have outperformed the broader market. MJ has provided a total return of 54% over the past 12 months, above the Russell 1000 index’s total return of 44.8%. These market performance numbers and all statistics in the tables below are as of May 26, 2021.

Here are the top 5 marijuana stocks with the best value, the fastest growth, and the most momentum.

Value investing is a factor-based investing strategy in which you pick stocks that you believe are trading for less than what they are intrinsically worth, usually by measuring the ratio of the stock’s price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings ratio (P/E Ratio). Value investors believe that if a business is cheap compared to its intrinsic value, in this case as measured by its P/E ratio, the stock price may rise faster than others as the price comes back in line with the worth of the company. These are the marijuana stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio.

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• High Tide Inc.: High Tide is a Canada-based cannabis retailer. The company operates a cannabis retail chain, global manufacturing and distribution of smoking accessories, and an accessories e-commerce platform. Its brands include Canna Cabana, KushBar, New Leaf, META Cannabis, Grasscity, and Smoke Cartel. On May 18, the company announced that it had been added to the Cannabis ETF (THCX). THCX is an exchange-traded fund tracking the Innovation Labs Cannabis Index, a portfolio of 33 cannabis-related stocks. It trades in the U.S. under the ticker HITID.
• Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing vegetables like tomatoes, bell peppers, and cucumbers, the company also produces cannabis. The company distributes fresh produce from over nine million square feet of Controlled Environment Agriculture (CEA) greenhouses in Canada and the U.S., as well as from partner greenhouses in Canada and Mexico. For Q1 2021, Village Farms reported net loss of $7.4 million versus net income of $4.2 million in Q1 2020. The company posted net sales growth of 63.2% year-over-year (YOY), with cannabis accounting for about a third of sales for the quarter.
• Acreage Holdings Inc.: Acreage Holdings owns a portfolio of cannabis brands. Through its subsidiaries, the company engages in the cultivation, processing, manufacturing, and dispensing of cannabis and related products. Acreage has a footprint in 13 U.S. states, including 30 operational dispensaries and 18 cultivation and processing licenses. It trades in the U.S. under the ticker ACRHF.
• Cresco Labs Inc.: Cresco Labs is a consumer-packaged cannabis products company involved in growing, manufacturing, and distribution. The company operates in ten states, owns production facilities and dispensaries, and holds 44 retail licenses. Its brands include Cresco, Reserve, Remedi, High Supply, and Wonder Wellness Co. For Q1 2021, Cresco Labs’ net loss narrowed YOY, while revenue climbed by 168.8%. It trades in the U.S. under the ticker CRLBF.
• Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group is a holding company. Through subsidiaries, it makes and distributes hydroponic products to customers throughout the U.S. and in Canada. The company has 6 distribution locations in the U.S., offering a product line of over 5,000 items.

These are the top marijuana stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Only one of the companies listed below reported positive EPS growth in the most recent quarter.

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• Jushi Holdings Inc.: Jushi Holdings is a holding company focused on building a portfolio of 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; Seche, which offers various branded ground and flower cannabis products; and Tasteology, a provider of THC-infused products. On May 5, the company announced that it had closed the acquisition of a 93,000 sq. ft. facility, operated by its subsidiary Dalitso LLC, along with roughly 9 acres of surrounding land in Virginia. The price of the acquisition was roughly $22 million. Jushi Holdings reported revenues of $41.7 million, an increase of 29% from the previous quarter, on a net loss of $26.1 million for the first quarter of 2021. Jushi also trades in the U.S. under the ticker JUSHF.
• Innovative Industrial Properties Inc.: Innovative Industrial Properties acquires, develops, builds, and manages industrial facilities used by companies in the medical cannabis industry. The company is structured as a real estate investment trust (REIT) which must distribute at least 90% of its taxable income to stockholders through dividends. On May 27, the company reported that it had closed on a 70,000 square foot industrial space in North Adams, Massachusetts, for a purchase price of $3.1 million. Along with the closing, Innovative Industrial Properties entered into a long-term, triple-net lease at the property with Temescal Wellness of Massachusetts, LLC, for use as a facility for the cultivation and processing of cannabis.
• Cresco Labs Inc.: See above for company description.
• Columbia Care Inc.: Columbia Care cultivates, manufactures, and sells medical and recreational cannabis products. The company has 35 licenses in 15 jurisdictions in the U.S. and the European Union. It has 54 facilities in operation or development.
• High Tide Inc.: See above for company description.

Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which 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 stocks that had the highest total return over the last 12 months.

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• GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products. The company operates retail hydroponic and organic specialty gardening retail outlets. It offers thousands of products, including plant nutrition, farming soils, advanced lighting technology, and hydroponic and aquaponic equipment. As one of the largest hydroponics suppliers in the country it owns and operates 53 retail and distribution centers. GrowGeneration announced on May 25 the acquisition of The Harvest Company, a hydroponic supply center with stores in California’s Emerald Triangle, the largest cannabis-producing region in the country. The terms of the acquisition were not disclosed.
• Jushi Holdings Inc.: See above for company description.
• TerrAscend Corp.: TerrAscend is a Canada-based integrated cannabis company offering a range of products, brands, and services for the global medical- and adult-use cannabis markets. Its portfolio of businesses include: The Apothecarium, a cannabis dispensary; Arise Bioscience Inc., a manufacturer and distributor of hemp-derived products; Ilera Healthcare, a medical marijuana cultivator, processor, and dispenser; Valhalla Confections, a manufacturer of cannabis-infused edibles; and more. TerrAscend posted a net loss of $12.7 million for Q1 2021, as compared to net loss of $10.3 million for Q1 2020. Net sales more than doubled over the same period. It also trades in the U.S. under the ticker TRSSF.
• Planet 13 Holdings Inc.: Planet 13 Holdings is a vertically-integrated cannabis company, engaging in the cultivation, processing, and distribution of cannabis and related products. The company holds six licenses in the Nevada market and operates a major cannabis store just steps from the Las Vegas Strip. The store offers vapes, edibles, pre-rolls, and concentrates. Planet 13’s brands include, Planet 13 Las Vegas, Medizin, Trendi, Dreamland Chocolates, and HaHa Gummies. Planet 13 reported 1Q 2021 revenues of $23.8 million, an increase of 41.8% from the same period last year. It had net income of $0.4 million as compared to a net loss of $1.4 million in 1Q 2020. It also trades in the U.S. under the ticker PLNHF.
• Tilray Inc.: Tilray is a Canada-based pharmaceutical company which develops cannabis-based medicines, drugs, drops, and related products. Tilray provides more than 20 brands in over 20 countries in North America, Europe, and Latin America. On May 3, Tilray announced that it had completed its business combination with Aphria Inc., with combined market capitalization as of April 30 of $8.2 billion. The two companies, both of which operate in the cannabis-focused consumer packaged goods space, will operate as Tilray.

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