Top Marijuana Stocks for August 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 remained strong despite the economic disruption caused by the global pandemic.

Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have underperformed the broader market. MJ has provided a total return of 37.7% over the past 12 months, above the Russell 1000 index’s total return of 40.1%. These market performance numbers and all statistics in the tables below are as of July 26, 2021.

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

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.

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• 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.
• 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. It trades in the U.S. under the ticker VFF. The company announced on July 1 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. This increase in production capacity is the result of an amendment to its cultivation license made by the regulator Health Canada.
• 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. It trades in the U.S. under the ticker CRLBF. In late June, Cresco Labs announced the opening of its fourth dispensary in Pennsylvania. Located in Philadelphia, the dispensary is the 33rd operating U.S. store for Cresco.
• 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. On July 1, Hydrofarm announced the completion of its acquisition of Aurora, a maker and supplier of organic hydroponic products. The previously-announced value of the transaction is $161 million.
• Charlotte’s Web Holdings Inc.: Charlotte’s Web Holdings is a producer and distributor of hemp-based CBD wellness products including topical items, liquids, and capsules including cannabinoids. The company holds 5 patented hemp cultivars and more than 22,000 unique retail doors. Charlotte’s Web is headquartered in the U.S. and has been listed on the Canadian Stock Exchange since 2018. It trades in OTC markets in the U.S. under the ticker symbol CWBHF.

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.

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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. Jushi also trades in the U.S. under the ticker JUSHF. The company announced on July 22 that more than 50% of the company’s issued and outstanding subordinate voting shares were directly or indirectly owned by shareholders domiciled in the U.S. as of June 30, 2021. As a result, the company said it is no longer a “foreign private issuer” under U.S. securities laws, and will be subject to SEC reporting requirements applicable to U.S. domestic companies no later than Jan. 1, 2022.
• 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 55 retail and distribution centers. GrowGeneration announced in late July the acquisitions of two U.S.-based hydroponic garden centers. The first was Aqua Serene, which has annual revenue of more than $14 million. The second acquisition was Mendocino Greenhouse and Garden Supply, which has annual sales greater than $8 million. Terms of both deals were not disclosed.
• Cresco Labs Inc.: See above for company description.
• 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.
• 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. It also trades in the U.S. under the ticker TRSSF.

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.: See above for company description.
• Ayr Wellness Inc.: Ayr Wellness is a U.S.-based cannabis company involved in cultivation, manufacturing, and dispensing of cannabis and cannabis-derived products. The company’s product portfolio includes flowers, tinctures, edibles, and vape products under brands including Kynd, Sira Naturals, Entourage, and Highly Edible. Ayr Wellness also trades in OTC markets in the U.S. under the ticker symbol AYRWF. In late July, Ayr Wellness announced several acquisitions. The first announcement was the purchase of of Tahoe Hydroponics Company Inc. and NV Green, Inc., two Nevada-based cannabis companies involved in production of cannabis flower and concentrates. Ayr Wellness is paying total consideration of $17 million for Tahoe Hydroponics, which operates about 33,000 square feet of total cultivation and manufacturing space. The second announcement was the acquisition of Herbal Remedies Dispensaries LLC, an operator of two licensed retail dispensaries in Illinois, for total consideration of $30 million.
• Jushi Holdings Inc.: See above for company description.
• Tilray Inc.: Tilray is a Canada-based pharmaceutical company that 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 the closing of the previously announced merger with Aphria Inc., creating the new Tilray company.

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