11 Best Cannabis Stocks To Invest In

In this article, we are going to discuss the best cannabis stocks to invest in.

The history of cannabis cultivation in America dates back to the early colonists, who grew hemp for textiles and rope. The plant was also widely used as a patent medicine during the 19th and early 20th centuries, described in the United States Pharmacopeia for the first time in 1850. Several political and racial factors led to the criminalization of cannabis in 1937 with the passage of the Marijuana Tax Act, but its legal status is now finally changing in many places.

Also read: 20 States with the Highest Weed Consumption in the US

Cannabis Industry in the United States:

The United States of America is the country that consumes the most weed in the world. As we mentioned in our article – 30 Cities with the Highest Weed Consumption in the US – the American legal cannabis industry fared well in 2023 as legal sales across the 38 states that allow some form of regulated marijuana reached $28.8 billion, a 10.3% increase from the previous year. Meanwhile, the legal cannabis industry also added 22,952 new jobs last year – a sign that the national business climate has somewhat stabilized following the turmoil of the previous two years. According to the 2024 Vangst Jobs Report, there were over 440,445 jobs supported by legal cannabis nationwide as of early 2024, an increase of 5.4% from 2023. The increasing legalization of cannabis and rising acceptance of its use for medical purposes are the key factors fueling the industry. Growth is also expected to come from new markets. One such example is Nebraska’s vote in favor of legalizing medical marijuana last month.

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.

Major Blow to the US Cannabis Revolution:

In a significant setback for America’s legal cannabis industry, Florida voters rejected a ballot measure to legalize recreational marijuana in November. The measure, known as Amendment 3, got 55.9% support, failing to meet the required 60% threshold. This was despite historic levels of funding, a rigorous advertising campaign, and even an endorsement from President-elect Donald Trump.

Florida, with its population of 20 million people, is already home to the country’s largest medical marijuana market, boasting an annual revenue of $2 billion. The Sunshine State is also a popular tourist destination (especially during spring break) and attracts more than 140 million tourists every year. If Amendment 3 had been passed, Florida was expected to become a $6 billion cannabis market by 2026.

Through the Smart & Safe Campaign, Florida’s cannabis companies and individual donors collectively contributed more than $150 million to get legalization enacted into law, with most of it coming from the largest medical marijuana operator in the state. On the other hand, Florida Governor Ron DeSantis, who aggressively campaigned against Amendment 3, spent an estimated $50 million of taxpayer money on radio and television ads to successfully convince enough voters to reject the measure. Meanwhile, hedge fund billionaire Ken Griffin also came out against legalization and donated $12 million to the Vote No On 3 campaign.

This setback inevitably had an impact on cannabis stocks, which witnessed a downturn following the news of the rejection. Amplify Alternative Harvest ETF, the first US ETF to target the global cannabis industry, has fallen by almost 30% since November 4, closing at $2.33 on December 13, 2024.

Florida voters will now have to wait for two more years before cannabis legalization can get back on the ballot.

With that said, here are the Best Marijuana Stocks to Buy Now.

Methodology:

To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 11 companies operating in the cannabis sector with the highest number of hedge fund investors. When two or more companies had the same number of hedge funds investing in them, we ranked them by the revenue of their last financial year instead. Following are the Best Marijuana Stocks According to Most Hedge Funds.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

11. Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) 

Number of Hedge Fund Holders: 5

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) is a leading manufacturer and distributor of hydroponics equipment and supplies for controlled environment agriculture. The company’s products are used in new or emerging industries or segments, including cannabis.

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) had mixed results in Q3 of 2024 as its revenue decreased by 18.8% to $44 million compared to $54.2 million in the same period last year. This decline was primarily attributed to a 13.7% decrease in volume mix due to oversupply in the cannabis industry. However, profitability remains a top priority for the company and it has executed several restructuring initiatives to become more cost-efficient. Notably, since the beginning of 2023, Hydrofarm has reduced its manufacturing footprint by nearly 60% and its total manufacturing and distribution space by almost 45%. As a result, despite the decrease in revenue, the company achieved a Q3 gross profit of $8.5 million or 19.4% of net sales, compared to $3.3 million or 6.1% of net sales a year ago. Its net loss also declined by over 34% to reach $13.1 million.

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) ended Q3 with over $41 million of total liquidity, including cash in hand and over $17 million of availability on its untapped revolving line of credit. Meanwhile, its net debt at the end of the quarter was approximately $104 million. The company also remains focused on the diversification of its revenue sources as it wants to be less reliant on cannabis in the US and Canada. As a percentage of sales, its non-cannabis and non-US-Canada revenue sources increased several hundred basis points compared to Q3 last year.

5 hedge funds tracked by Insider Monkey held shares of Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) at the end of Q3 2024, with Renaissance Technologies holding the largest stake of 753,600 shares, valued at $519,230.

10. Advanced Flower Capital Inc. (NASDAQ:AFCG) 

Number of Hedge Fund Holders: 6

Advanced Flower Capital Inc. (NASDAQ:AFCG) provides financial services to the cannabis industry, including real estate loans and loan underwriting. The Florida-based company offers direct and bridge loans ranging from $10 million to $100 million, which are crucial for an industry growing quickly but facing severe banking and financing issues.

In Q3 of 2024, Advanced Flower Capital Inc. (NASDAQ:AFCG) reported distributable earnings of $0.35 per share, beating the Wall Street Analysts’ estimate of $0.34 per share. Over the last four quarters, the company has surpassed consensus EPS estimates twice. Moreover, it also paid its first post-spin dividend of $0.33 per share to shareholders and maintains a dividend policy to pay between 85% and 100% of its distributable earnings over the year.

Advanced Flower Capital Inc. (NASDAQ:AFCG) remains focused on partnering with strong operators in limited license states and further diversifying its portfolio. It closed several important deals in Q3, including an $11 million senior secured credit facility for Private Company Q, expansion of senior secured facilities to two existing borrowers, and closing of a $41 million senior secured credit facility for Story of Maryland, a leading vertically integrated operator in Maryland’s adult-use cannabis market. The company has exceeded its $100 million origination target for the year, reaching $116 million in total new originations by the end of Q3.

Advanced Flower Capital Inc. (NASDAQ:AFCG) ended the quarter with total assets of $366.6 million, including cash and cash equivalents of $122.2 million, which included $60 million drawn on its line of credit that was subsequently repaid in full on October 1, 2024. Its line of credit provides it with up to $60 million in available funds that can be drawn as needed.

9. Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI)

Number of Hedge Fund Holders: 6

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) is a company that provides loans and financing for commercial real estate. They focus on state-licensed cannabis operators in limited-license states, offering secured loans and other financial help to support their businesses.

The firm has chosen to be taxed as a commercial mortgage real estate investment trust (REIT), so it isn’t required to pay corporate taxes. This allows it to distribute 90% of its taxable income to stockholders, making it a great option for investors looking for a regular income.

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) had a strong Q3 2024, reporting revenue of $14.16 million, a 4.6% YoY increase. Net income also grew by 19% YoY to reach $11.2 million. As a result, the company paid a regular quarterly cash dividend of $0.47 per share of common stock for Q3 2024 on October 15, 2024.

Also in October, Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) secured a $50 million unsecured term loan with a fixed interest rate of 9% and received an investment-grade BBB+ rating from Egan-Jones, giving it liquidity of over $75 million to fund new investments.

Shares of Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) were held by 6 hedge funds in the IM database at the end of Q3 2024, with a total stake value of $7.1 million, up by over 53% from the previous quarter.

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) was also included in our list of the Most Undervalued Pot Stocks to Buy According to Analysts.

8. GrowGeneration Corp. (NASDAQ:GRWG)

Number of Hedge Fund Holders: 6

Next on our list of the Best Marijuana Stocks to Invest in 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. Incorporated in Colorado in 2014, GrowGen claims to be the largest chain of specialty retail hydroponic and organic garden centers in the United States.

The company had a tough Q3 2024 as its revenue fell by over 10.1% YoY to reach $50 million. The drop was driven by the closure of 19 retail locations as part of the company’s ongoing restructuring, including 12 solely in the last quarter. Net loss also increased by almost 56% YoY to reach $11.4 million. However, there was positive news regarding same-store sales, which grew by 12.5%, supported by strong commercial sales and robust customer retention. This marked the first quarter of positive same-store sales in 3 years. Operating expenses were also decreased by 5.4%, falling to $22.9 million, as GrowGeneration Corp. (NASDAQ:GRWG) continued to streamline its operations through store consolidations and cost-cutting measures. The company ended Q3 with a solid cash position, maintaining $55.2 million in cash equivalents and marketable securities, with no debt. It also repurchased an additional $1.8 million of stocks during the quarter, as it ‘continues to believe its equity has a compelling value’.

GrowGeneration Corp. (NASDAQ:GRWG) is shifting its focus to e-commerce operations, where the demand is higher. Its new B2B e-commerce portal, meant to be a one-stop destination for all hydroponic product needs across various categories, is set to go live in the fourth quarter.

6 hedge funds in the IM database held a stake in GrowGeneration Corp. (NASDAQ:GRWG) at the end of Q3 2024, with D E Shaw holding the largest stake of 608.944 shares, valued at just under $1.3 million.

7. Aurora Cannabis Inc. (NASDAQ:ACB)

Number of Hedge Fund Holders: 6

Aurora Cannabis Inc. (NASDAQ:ACB), together with its subsidiaries, engages in the production, distribution, and sale of cannabis and cannabis-derived products across Canada, Europe, Australia, and South America. The company is the leading provider of medical cannabis to Canadian patients – a market worth over $250 million in fiscal year 2023-24.

Aurora Cannabis Inc. (NASDAQ:ACB) had a strong Q2 2025, ending September 30th, 2024, with total net revenue of $81.1 million, compared to $63.1 million in the prior year period. Medical cannabis, which is the core segment of Aurora, grew 41% YoY to reach $61.3 million. The company’s strategy of going global also seems to be paying off, as its international revenue increased 93% to $35 million, exceeding Canadian medical revenue for the first time and contributing 57% to total global medical cannabis revenue. The only offset came from the consumer cannabis segment, which witnessed a YoY downturn of 13%, but it represents only around 13% of the firm’s total sales.

As a result, Aurora Cannabis Inc. (NASDAQ:ACB) reported a net profit of $1.7 million in the last quarter, a YoY increase of a notable 325%. This means that the company came out with quarterly earnings of $0.04 per share, beating Wall Street analysts’ estimates of a loss of $0.22 per share and topping consensus revenue estimates three times over the last four quarters. It also ended the quarter with approximately $152 million in cash and cash equivalents and no debt in its cannabis business.

Aurora Cannabis Inc. (NASDAQ:ACB) maintains a world-class research and genetics facility in Canada and announced several new medical product advancements last month, keeping its primary focus on the high-margin medical cannabis business.

6. Village Farms International, Inc. (NASDAQ:VFF)

Number of Hedge Fund Holders: 6

Village Farms International, Inc. (NASDAQ:VFF) stands as one of North America’s leading growers, marketers, and distributors of top-quality, greenhouse-grown fruits and vegetables. The company’s wholly-owned Canadian subsidiary, Pure Sunfarms, is one of the single largest cannabis operations in the world, the lowest-cost greenhouse producer, and one of Canada’s best-selling brands.

In Q3 2024, Village Farms International, Inc. (NASDAQ:VFF) continued its solid performance with total sales growth of 20% YoY to $83.4 million, with strong top-line growth in both Canadian cannabis and fresh produce. It also maintained the #1 market share in flower in Canada and then grew that market share by 2.7% during the third quarter. The company remains focused on innovation and introduced a new strain called Neon Lambo, and is also set to launch new brand and product introductions in the vape and infused pre-roll categories in the next two quarters. However, Q3 still ended with a loss of over $212,000, though it was much better than the loss of over $900,000 incurred during the same period last year.

Village Farms International, Inc. (NASDAQ:VFF) is benefitting from its focus on the international cannabis market. Exports from Canada increased 111% from the third quarter last year, with continued improvement in sales to its German, Australian, and UK partners. Moreover, the company’s EU-GMP certification has been recently renewed and it has also commenced cultivation in the Netherlands – its first international recreational market. Sales are set to commence during the first quarter of 2025, catering to a fully legal market estimated to be between $3.1 to $3.7 billion annually. Unlike Canada, there is no excise tax in the Netherlands, which will enable the company to offer much more favorable product pricing.

Village Farms International, Inc. (NASDAQ:VFF) is included among the Biggest Vertical Farming Companies in the World.

5. Canopy Growth Corporation (NASDAQ:CGC)

Number of Hedge Fund Holders: 9

An early mover in the Canadian market, Canopy Growth Corporation (NASDAQ:CGC) engages in the production, distribution, and sale of cannabis and cannabinoid-based products for both adult use and medical purposes.

Canopy Growth Corporation’s (NASDAQ:CGC) net revenue decreased 9% YoY in Q2 2025 ending September 30th 2024. However, if we exclude net revenue from businesses divested during the prior fiscal year, net revenue increased by 3%. Its Germany-based Storz & Bickel business, known for premium high-margin devices like the Volcano and Venti, delivered an overall net revenue growth of 32% YoY. The brand also witnessed strong growth in the US, led by increased orders from new distribution partners. Moreover, the company’s Canadian medical cannabis segment grew 16% YoY, while the Canada adult-use cannabis declined by 24%, in part due to an interruption in the supply of Wana edibles. It also seems to be doing well on the international front, as its sales grew by 72% YoY in the high-margin European markets. Canopy Growth’s asset-light model for Europe is also coming online now, supported by agreements with multiple EU-based cultivators, and is expected to provide the scalability that it needs to meet rising demand over the coming quarters without the need for heavy capital investments. The firm still incurred a net loss of $820,000 during Q2 2025, but it was approximately 37% less than the net loss it suffered in the same period last year.

The company is positioning itself to be a top Canadian entrant into the US market, as earlier this week, it announced the acquisition of Acreage, a multi-state operator of cannabis ‎cultivation and retailing facilities in the country. This comes after it had already announced the acquisitions of Wana Wellness, The CIMA Group, and Mountain High Products in October.

David Klein, CEO of Canopy Growth Corporation (NASDAQ:CGC) stated:

“Completing the acquisition of Acreage marks the final step in establishing Canopy USA as a unified platform which we believe offers significant upside as the Canopy USA portfolio of brands can now capitalize on the rapidly expanding U.S. cannabis market, independent of the need for federal legalization. With a vertically integrated presence across key U.S. states in the Midwest and Northeast, as well as licensing agreements which support asset-light operations in state-legal markets nationally, Canopy USA is well positioned to demonstrate efficient growth ahead.”

4. SNDL Inc. (NASDAQ:SNDL)

Number of Hedge Fund Holders: 10

SNDL Inc. (NASDAQ:SNDL) is the largest private-sector liquor and cannabis retailer in Canada. The company also operates as a licensed cannabis producer and stands as one of the country’s premier vertically integrated cannabis enterprises. SNDL has shown massive growth over the last few years, with its revenue skyrocketing from $60.9 million in 2020 to just over $909 million last year. That said, the Calgary-based firm still hasn’t made a profit in its last four financial years. To help improve its profitability, the liquor and cannabis retailer announced a restructuring plan in July to help slash its annual expenses by $20 million.

SNDL Inc. (NASDAQ:SNDL) is finally transitioning from a meme stock into a real business. The company represents deep value with an imminent catalyst for growth as it offers robust downside protection through its various assets. These include its core Canadian liquor and cannabis business which is nearing cash flow breakeven after recent efficiency improvements. Other US assets, including loans and properties in Michigan, Massachusetts, Nevada, and Texas, provide a safety net against potential downturns.

SNDL Inc. (NASDAQ:SNDL) remains focused on strategic expansion and announced the acquisition of all outstanding shares of Nova Cannabis Inc. recently, marking a major milestone. Moreover, it has also won a bid to acquire Indiva Limited, a leading producer of cannabis edibles in Canada. To return value to its shareholders, SNDL Inc. (NASDAQ:SNDL) announced a share repurchase program of around $70.3 million in November. In Q3 of 2024, the company also increased its cash balances from $183 million to $263 million and continues to have no outstanding debt.

3. Cronos Group Inc. (NASDAQ:CRON)

Number of Hedge Fund Holders: 13

Cronos Group Inc. (NASDAQ:CRON), a cannabinoid company based in Canada, is engaged in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for both medical and adult-use markets. A noteworthy aspect of the company is its close association with Altria Group, a bigwig in the tobacco industry which maintains a 41% stake in Cronos that it acquired for $1.8 billion in 2019.

Cronos Group Inc. (NASDAQ:CRON) also hasn’t been able to make any net profit over the last 4 years, but its revenue has improved consistently. That said, the company had a solid Q3 2024 as it reported a net revenue uptick of 38% YoY to $34.4 million. This comes after Cronos had already reported a notable 46% YoY increase in net revenue in Q2, highlighting its strong growth trajectory. The majority of this growth stems from its increasing market share in Canada, despite the high excise taxes and overregulation in the country. Notably, Cronos Group Inc. (NASDAQ:CRON) managed to deliver such impressive results while also decreasing operating expenses by $3 million YoY (adjusted for non-cash impairments), significantly improving EBITDA from -$15 million to -$6 million.

Cronos Group Inc. (NASDAQ:CRON) maintains a strong balance sheet, enabling it to capitalize on future growth opportunities. At the end of Q3, the company reported $862 million in cash – significantly exceeding its current market capitalization – and additional value in loan receivables and real estate assets, with zero debt obligations.

Cronos Group Inc. (NASDAQ:CRON) presents a good opportunity to investors, offering limited downside risk thanks to its balance sheet strength while capturing market share in multiple countries and improving efficiency. It is included in our list of the Best Marijuana Stocks to Buy Now.

2. Tilray Brands, Inc. (NASDAQ:TLRY)

Number of Hedge Fund Holders: 16

The New York-based Tilray Brands, Inc. (NASDAQ:TLRY) has a highly diversified global portfolio – operating in more than 20 countries with businesses in medical adult-use cannabis, beverages, spirits, wellness products, and a vast array of consumer-connected lifestyle brands. The core business of Tilray Brands, Inc. (NASDAQ:TLRY) is cannabis and it is the number one cannabis business in Canada, the leading medical cannabis business across Europe, and the top branded hemp business in North America. The company has lately been very active in acquiring other industry players to expand its presence and the strategy seems to be paying off. For example, its acquisition of Redecan in June 2023 has helped it gain a strong footing in categories like pre-rolls, oils, and capsules. As a result, Redecan has now moved up to the number six position in Canada as reported by Hifyre data, and now the brand is also launching in Australia. Moreover, in September, Tilray entered the lucrative US THC beverage market with a range of Delta-9 THC mocktails and seltzers through its newly formed Tilray Alternative Beverages business unit.

Tilray Brands, Inc. (NASDAQ:TLRY) forayed into the alcohol sector last year when it acquired eight beer and beverage brands from Anheuser-Busch InBev for an undisclosed amount, making it the 5th largest craft beer business in the US with a 4.5% market share. To further strengthen its craft portfolio, the company announced in August that it had agreed to acquire another four craft beer brands from Molson Coors – Hop Valley Brewing Company, Terrapin Beer Co., Revolver Brewing, and Atwater Brewery.

This venture seems to be bearing fruit, as Tilray Brands, Inc. (NASDAQ:TLRY)’s alcohol business now accounts for 28% of its revenue. Overall, the company’s beverage segment, including craft beer, spirits, non-alcoholic beers, and other drinks grew 132% in net revenue YoY during the fiscal Q1 of 2025.

With 16 hedge fund investors tracked by IM at the end of Q3 2024, Tilray Brands, Inc. (NASDAQ:TLRY) was also included in our list of the Best Beer Stocks to Buy Now.

1. The Scotts Miracle-Gro Company (NYSE:SMG)

Number of Hedge Fund Holders: 28

The Scotts Miracle-Gro Company (NYSE:SMG) is the world’s largest marketer of branded consumer products for lawn and garden care. The Ohio-based company has applied its expertise in horticulture and gardening to develop innovative technologies and solutions specifically tailored for cannabis cultivation.

In Q4 of 2024, net sales of The Scotts Miracle-Gro Company (NYSE:SMG) rose 10.7% YoY to $414.7 million and surpassed the consensus estimates of $393 million. The uptick was due to higher sales in the US consumer division, where sales went up by 54% to $309.7 million, driven by the normalization of shipment timing. However, the company still ended the quarter with a loss of $244 million, though it was much better than the $468.4 million loss it suffered in the same period last year. Moreover, it ended the fiscal year 2024 with adjusted EBITDA growth of 20%, finishing at $539 million, despite a lawn and garden market that was down overall.

The Scotts Miracle-Gro Company (NYSE:SMG) has been facing several challenges over the last few years, including high debt and an unsustainable cost structure due to a decrease in demand after the pandemic. Consequently, the company has made some hard decisions to right-size its business and cut over $400 million in operating expenses. These decisions included mass layoffs and the closure of distribution facilities, leading to a loss of talent and hindering the company’s ability to innovate, which is crucial given the shifting market dynamics.

The Scotts Miracle-Gro Company (NYSE:SMG)’s $1.5 billion investment into its Hawthorne segment has proven to be a very costly affair. In 2023, Hawthorne’s revenue fell dramatically, and the business reported a loss of $50 million. However, SMG announced in its Q4 2024 earnings call transcript that it has managed to dismantle Hawthorne to make it a much smaller and more profitable business, while also reinvesting $100 million into its brands, sales force, supply chain, and innovation.

Shares of The Scotts Miracle-Gro Company (NYSE:SMG) were held by 28 hedge funds in the IM database at the end of Q3 2024, making it the Best Marijuana Stock According to Hedge Funds.

Overall, The Scotts Miracle-Gro Company (NYSE:SMG) ranks first on our list of the best marijuana stocks. While we acknowledge the potential for SMG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.