In this article, we are going to discuss the 10 best cannabis stocks to buy according to billionaires.
2025 didn’t start off very well for the American cannabis sector. The recent failure of the adult-use ballot initiative in Florida, the lack of prioritization of federal reforms, and pricing pressure by the black market have contributed significantly to cannabis equity values reaching near record lows. MSOS, the first actively managed US-listed ETF with dedicated cannabis exposure focusing exclusively on US companies, has fallen by just over 36% since the beginning of the year, against a decline of 1.72% by the general market.
READ ALSO: 10 Best Alcohol Stocks to Buy According to Billionaires
To make matters worse, the biggest multi-state cannabis operators have as much as $6 billion in debt maturing next year, according to Whitney Economics. Moreover, due to federal illegalization, these companies cannot turn to the US bankruptcy court to keep their creditors at bay while renegotiating their debt. As a result, these businesses will be forced to refinance their debt at higher interest rates and onerous contractual covenants, which will be extremely difficult to manage given the declining profitability of the sector. A recent survey by Whitney Economics revealed that only 27.3% of cannabis operators nationwide are profitable, compared to 42% in 2022.
Also, despite the stringent crackdowns, the cannabis black market continues to be a constant thorn in the side of licensed operators. The market remains flooded with illegal weed, and according to cannabis market tracker BDSA, the US witnessed about $44 billion in illicit sales last year compared to around $31 billion in regulated, legal sales. The black market, combined with an oversaturation of legal operators, has led to a massive decline in prices and, hence reduced margins. The US Cannabis Spot Index, which tracks wholesale prices in 22 states, sits at $991 per pound after reaching a record low in early January of $888. This is significantly down from its peak of $2,133 in September 2015, during the early period of licensed sales in some states.
Given the tough conditions at home, a growing number of cannabis operators are now looking to capitalize on the growing opportunities abroad. As you will notice below, several cannabis stocks in our list managed to increase their sales in the last quarter also due to their expanding international footprint and revenues. With legalization gaining traction worldwide, several industry veterans are now exporting cannabis internationally or straight up establishing growing facilities in their target markets. A great example is how Canada’s volume of cannabis exports to Germany doubled from 16,895 kilograms (roughly 37,247 pounds) in 2023 to 33,155 kilograms last year, according to Germany’s Federal Institute for Drugs and Medical Devices.
As of the writing of this article, 24 states have legalized recreational weed in America, in addition to the District of Columbia. However, possessing or selling marijuana remains a crime under federal law, punishable by prison time and fines.
With that said, here are the Best Marijuana Stocks According to Billionaires.
A close-up shot of a cannabis plant, showing its intricate details.
Our Methodology
To collect data for this article, we scanned Insider Monkey’s database of billionaires’ stock holdings and picked the top 10 companies operating in the cannabis sector with the highest number of billionaire investors in Q4 of 2024. When two or more companies had the same number of billionaires backing them, we ranked them by the revenue of their last financial year. Following are the Best Marijuana Stocks to Invest in According to Billionaires.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Advanced Flower Capital Inc. (NASDAQ:AFCG)
Number of Billionaire Holders: 3
Advanced Flower Capital Inc. (NASDAQ:AFCG) is a leading commercial mortgage REIT that provides institutional loans to state law compliant cannabis operators in the US. The company originates, structures, underwrites, and manages loans ranging from $10 million to over $100 million, providing relief to a sector that faces severe financial and banking issues due to federal illegalization.
Advanced Flower Capital Inc. (NASDAQ:AFCG) had a tough Q4 2024 as it reported an EPS of -$0.05, significantly below estimates by $0.41. The company’s revenue of $7.64 million was also down by almost 52.2% YoY and missed expectations by $4.12 million. However, AFCG stated that its active pipeline remains strong, with over $380 million in deals as of March 1, 2025. Moreover, it ended the year 2024 with total assets of $402.1 million, including cash and cash equivalents of $103.6 million. Despite the tough financials, the firm announced a dividend of $0.23 per share for Q1 2025, though it was a 30.3% decrease from the previous dividend of $0.33. AFCG has previously declared that its dividend policy is to pay between 85% and 100% of distributable earnings over the year.
Shares of Advanced Flower Capital Inc. (NASDAQ:AFCG) have plunged by almost 25% since the beginning of the year.
9. GrowGeneration Corp. (NASDAQ:GRWG)
Number of Billionaire Holders: 3
Ranked at number 9 on our list of the Best Marijuana Stocks to Buy is GrowGeneration Corp. (NASDAQ:GRWG), a company that sells hydroponic gardening products that end users may purchase for use in new and emerging industries or segments, including the growing of cannabis.
GrowGeneration Corp. (NASDAQ:GRWG) had a mixed Q4 2024 as its EPS of -$0.19 missed forecasts by $0.07. But the company’s revenue of $50 million managed to beat estimates by $1.28 million, even if it was down by 10.2% YoY. GRWG is working to reduce its annual expenses by approximately $12 million, and in this regard, the company closed 19 of its retail locations last year. Notably, the company ended the year 2024 with zero debt and a strong cash equivalent and marketable securities position of $56.5 million. It also completed a $6 million share repurchase program during the year, demonstrating its commitment to returning value to its shareholders.
In 2024, GrowGeneration Corp. (NASDAQ:GRWG) moved away from a focus on stores in order to transform itself into a product-driven company with a business-to-business customer focus to drive revenue growth. It also launched a new B2B e-commerce portal in Q4 2024 and received positive feedback. Another notable achievement was that the company’s proprietary brand sales constituted over 30% of its cultivation and gardening revenue in the fourth quarter. The target is to increase this number to 35% by the end of 2025.
