11 Best Marijuana Stocks To Buy Now

In this article, we discuss 11 best marijuana stocks to buy now.

Previously, we reported that in 2022, the cannabis industry had a mixed performance, with some new markets experiencing growth while sales declined in established markets. COVID-19 played a role in this, leading to challenges such as job cuts and increased debt for many companies. However, there were positive developments as well, including more states legalizing adult-use cannabis and federal progress in reform efforts. Legal retailers faced difficulties with taxes, regulations, and competition from the illegal market, which are likely to continue in 2023. Despite these challenges, the growth rate of legal cannabis sales in the United States is expected to maintain a double-digit annual compound growth rate, even without federal legalization.

As per Hub International, the cannabis industry continues to face obstacles in achieving profitability. Challenges such as disruptions in the supply chain, product recalls, regulatory issues, and economic difficulties persist, making it crucial for comprehensive risk management strategies to mitigate the impact of these exposures. The industry is grappling with rising inflation and increased costs for essential resources like fertilizer, building materials, and packaging, which are negatively impacting its financial performance; notably, as companies diversify their hardware offerings, they also build 510 batteries to meet consumer demand. However, cannabis companies are hesitant to raise prices in an intensely competitive market. Furthermore, the industry is confronted with high taxes and barriers to interstate commerce, posing ongoing challenges. In the first half of 2022, over 20 of the largest publicly traded cannabis companies experienced losses of approximately $550 million, despite generating revenues of nearly $4.5 billion.

However, the acceptance and normalization of cannabis are gradually increasing, with each mainstream reference and recognition contributing to the erosion of opposition towards federal legalization. While political predictions may vary, the normalization of cannabis presents a significant opportunity for operators, brands, and markets to expand their presence in 2023. 

According to Cannabis Business Times, Missouri is set to transition from a medical cannabis market to an adult-use market within a short period of three months after passing a ballot initiative. The state’s active participation in the medical market, coupled with a low consumer tax rate, positions Missouri as an important state to monitor in 2023. In Minnesota, the legalization of edibles and beverages containing 5 mg of THC or less took place in 2022. This has led to the widespread availability of delivery services and on-premise consumption of THC-infused beverages in a state with a population of approximately 5.7 million. The recent election results, where Democrats secured control over the governorship, the Senate, and the House, have created a favorable political climate for cannabis. Notably, draft legislation for adult-use cannabis has already been unveiled, emphasizing its priority during the current legislative session.

To benefit from the growing opportunities in the cannabis industry, some of the best stocks to buy include Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company (NYSE:SMG), and Tilray Brands, Inc. (NASDAQ:TLRY). 

Our Methodology 

We selected the following marijuana stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Best Marijuana Stocks To Buy Now

11. Organigram Holdings Inc. (NASDAQ:OGI)

Number of Hedge Fund Holders: 5

Organigram Holdings Inc. (NASDAQ:OGI) is involved in the manufacturing and distribution of cannabis and cannabis-related items within Canada. The company provides a range of medical cannabis products, such as cannabis flowers, gummies, oils, and vaporizers, catering to both civilian patients and veterans. They also offer recreational cannabis for adult use. 

On April 13, Canaccord analyst Matt Bottomley maintained a Speculative Buy rating on Organigram Holdings Inc. but lowered the firm’s price target on the shares to C$2.25 from C$3.25. 

According to Insider Monkey’s first quarter database, 5 hedge funds held stakes worth $2.21 million in Organigram Holdings Inc., compared to 7 funds in the prior quarter worth $2.96 million. D E Shaw held the biggest stake in the company, comprising 1.4 million shares valued at $910,775. 

Like Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company, and Tilray Brands, Inc., Organigram Holdings Inc. is one of the best marijuana stocks to invest in. 

10. Leafly Holdings, Inc. (NASDAQ:LFLY)

Number of Hedge Fund Holders: 6

Leafly Holdings, Inc. (NASDAQ:LFLY) owns and operates an online platform connecting consumers with cannabis brands and licensed retailers. Through its website and mobile applications, Leafly Holdings, Inc. offers information, reviews, menus, and options for ordering and delivery to its audience. 

On May 11, Leafly Holdings, Inc. reported a Q1 GAAP EPS of -$0.14 and a revenue of $11.2 million, outperforming Wall Street estimates by $0.03 and $0.09 million, respectively. 

Benchmark analyst Daniel Kurnos maintained a Buy rating on Leafly Holdings, Inc. but trimmed the firm’s price target on the shares from $12.00 to $6.50 on December 8, 2022. While Leafly Holdings, Inc. did not perform well in the first half of 2022, the analyst noted that there were still potential opportunities for growth in the second half of the year. These include leveraging their industry-leading content portfolio and international capabilities for additional monetization, as well as the possibility of regulatory relief, particularly in major East Coast cities.

According to Insider Monkey’s first quarter database, 6 hedge funds were long Leafly Holdings, Inc., compared to 7 funds in the preceding quarter. 

9. Canopy Growth Corporation (NASDAQ:CGC)

Number of Hedge Fund Holders: 7

Canopy Growth Corporation (NASDAQ:CGC) specializes in the manufacturing, distribution, and retail of cannabis and hemp-derived products for both recreational and medical use. Their operations primarily focus on Canada, the United States, and Germany. The company’s product range includes dried cannabis flower, extracts, concentrates, beverages, gummies, and vaporizers. 

On April 14, Canopy Growth Corporation revealed its plans to refinance C$100 million of its outstanding 4.25% unsecured notes, which are set to mature in 2023. The company has entered into an exchange agreement with Greenstar Canada Investment Limited Partnership, a wholly-owned subsidiary of Constellation Brands. Through this agreement, Canopy Growth Corporation aims to eliminate C$100 million of its existing notes.

According to Insider Monkey’s first quarter database, 7 hedge funds were bullish on Canopy Growth Corporation, compared to 11 funds in the earlier quarter. Lee Ainslie’s Maverick Capital is a prominent stakeholder of the company, with 221,848 shares worth $388,234. 

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

Number of Hedge Fund Holders: 7

Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) engages in the production and distribution of equipment and supplies for controlled environment agriculture in the United States and Canada. The company offers a range of agricultural lighting devices, equipment for indoor climate control, nutrients, and plant additives. These products are utilized for growing and cultivating various crops, including cannabis, flowers, fruits, plants, vegetables, grains, and herbs within controlled environments. It is one of the best marijuana stocks to invest in. 

In response to Hydrofarm Holdings Group, Inc.’s Q1 results, Stifel analyst W. Andrew Carter adjusted the firm’s price target on the stock from $1.80 to $1.45 while maintaining a Hold rating on May 11. Stifel has a mixed perspective on the company, considering the narrower EBITDA loss as a positive, but remaining cautious due to the conservative outlook provided for revenue guidance. With uncertainties surrounding the timing and extent of Hydrofarm’s recovery, Stifel believes a neutral stance on the stock is warranted.

According to Insider Monkey’s first quarter database, 7 hedge funds were bullish on Hydrofarm Holdings Group, Inc., compared to 10 funds in the prior quarter. Michael Zimmerman’s Prentice Capital Management is the biggest position holder in the company, with 518,852 shares worth $897,614.

Here is what Baron Discovery Fund has to say about Hydrofarm Holdings Group, Inc. in its Q4 2021 investor letter:

“Our top 10 holdings represented 25.6% of the Fund’s net assets at the end of the fourth quarter. This is in line with historical weightings. Cash at the end of the quarter was 3.4%, which is in line with our low to mid-single digit targeted levels. We exited our position in Hydrofarm Holdings Group, Inc. as we felt the macro headwinds the company was facing in its end-markets were both challenging and worsening.”

7. Cronos Group Inc. (NASDAQ:CRON)

Number of Hedge Fund Holders: 8

Cronos Group Inc. (NASDAQ:CRON) is a cannabinoid company that engages in the production, marketing, and distribution of hemp-derived supplements and cosmetic products in the United States. Additionally, Cronos Group Inc. is actively involved in the cultivation, manufacturing, and marketing of cannabis and cannabis-derived products for both medical and adult-use markets. Their product range includes dried cannabis, pre-rolls, edibles, concentrates, and cannabis extracts. It is one of the best marijuana stocks to watch. 

On May 15, following Cronos Group Inc.’s Q1 results, Barclays analyst Gaurav Jain maintained an Equal Weight rating on the company’s shares but decreased the firm’s price target from $3.50 to $3. Jain attributed the adjustment to the challenging conditions within the industry and a less favorable macroeconomic environment, which have contributed to a more uncertain outlook for the company.

According to Insider Monkey’s first quarter database, 8 hedge funds were long Cronos Group Inc., compared to 7 funds in the last quarter. D E Shaw held the biggest stake in the company, comprising 1.95 million shares worth $3.7 million. 

6. Aurora Cannabis Inc. (NASDAQ:ACB)

Number of Hedge Fund Holders: 8

Aurora Cannabis Inc. (NASDAQ:ACB) specializes in the production, distribution, and sale of cannabis and cannabis-derived products within Canada and internationally. The company focuses on both medical and consumer cannabis products within the Canadian market. 

Aurora Cannabis announced on April 24 that it has bought back approximately $16.6 million worth of its convertible senior notes through multiple transactions since April. This move has allowed the company to save $1.9 million in annual interest payments. Once these repurchases are finalized, Aurora Cannabis will have approximately $59 million in outstanding notes. The purpose of these transactions is to lower the company’s debt and decrease its annual cash interest expenses. In fact, Aurora Cannabis has repurchased around $286 million of its convertible senior notes since December 2021, resulting in annual savings of approximately $16 million in cash interest.

According to Insider Monkey’s first quarter database, 8 hedge funds were bullish on Aurora Cannabis, compared to 9 funds in the prior quarter. Anand Parekh’s Alyeska Investment Group is a significant position holder in the company, with 820,000 shares worth $571,786.   

In addition to Jazz Pharmaceuticals plc (NASDAQ:JAZZ), The Scotts Miracle-Gro Company, and Tilray Brands, Inc., Aurora Cannabis is one of the premier marijuana stocks to buy. 

5. WM Technology, Inc. (NASDAQ:MAPS)

Number of Hedge Fund Holders: 9

WM Technology, Inc. (NASDAQ:MAPS) delivers ecommerce and compliance software solutions to retailers and brands operating in the cannabis market both in the United States and globally. The company also provides educational resources and information to assist new cannabis consumers in making informed decisions about the types of products they wish to purchase. On May 9, WM Technology, Inc. reported a Q1 GAAP EPS of -$0.03 and a revenue of $48 million, and as of March 31, the company had a cash balance of $25.9 million with no outstanding long-term debt. It is one of the best marijuana stocks to buy. 

On March 17, Canaccord analyst David Hynes maintained a Buy rating on WM Technology, Inc. and revised the firm’s price target for the shares to $3.00 from $4.75. The analyst expressed positive views on WM Technology, Inc.’s Q4 results, noting their successful execution in achieving profitability and fulfilling their commitments. Hynes also mentioned that the company’s Q1 guidance indicates a continuation of these favorable trends, which are expected to extend throughout 2023.

According to Insider Monkey’s first quarter database, 9 hedge funds were long WM Technology, Inc., compared to 15 funds in the prior quarter. Richard Mashaal’s Rima Senvest Management is the biggest stakeholder of the company, with 5.8 million shares worth about $5 million. 

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

Number of Hedge Fund Holders: 14

Tilray Brands, Inc. is involved in the exploration, cultivation, manufacturing, promotion, and distribution of medical cannabis products. The company operates through four segments – Cannabis Business, Distribution Business, Beverage Alcohol Business, and Wellness Business. Its product portfolio comprises both medical and adult-use cannabis items, such as GMP-certified flowers, oils, vapes, edibles, and topicals. It is one of the best marijuana stocks to watch. 

On May 26, Tilray Brands announced the pricing of its offering for $150 million in convertible senior notes, with an annual interest rate of 5.20%. These senior notes will mature in 2027. The closing of the offering is expected to take place on May 31, 2023. A portion of the net proceeds from this offering will be utilized to finance the concurrent repurchase of some of Tilray Brands’ outstanding 5.00% convertible senior notes due in 2023 and 5.25% convertible senior notes due in 2024. The rest of the proceeds will be allocated for general corporate purposes.

According to Insider Monkey’s first quarter database, 14 hedge funds were long Tilray Brands, compared to 18 funds in the earlier quarter. Sculptor Capital is a prominent stakeholder of the company. 

3. Innovative Industrial Properties, Inc. (NYSE:IIPR)

Number of Hedge Fund Holders: 15

Innovative Industrial Properties, Inc. (NYSE:IIPR) primarily focuses on acquiring, owning, and managing specialized properties. These properties are then leased to experienced operators who hold state licenses for their regulated medical-use cannabis facilities. The company’s main business involves providing real estate solutions for the cannabis industry. Innovative Industrial Properties, Inc. is one of the top marijuana stocks to invest in.

On May 8, Innovative Industrial Properties, Inc. reported a Q1 FFO of $2.25 and a revenue of $76.1 million, topping Wall Street estimates by $0.34 and $5.45 million, respectively. The company reported a net income attributable to common stockholders of around $40.8 million for the quarter, which translates to $1.43 per diluted share.

Compass Point analyst Merrill Ross assigned a Buy rating on Innovative Industrial Properties, Inc. on May 17, albeit with a reduced price target of $100, down from $125. The analyst expressed a generally positive stance on net lease and mortgage real estate investment trusts that offer financing to state-licensed cannabis operators operating in highly regulated and relatively young markets. However, Ross believes that the era of rapid growth for these REITs is in the past. 

According to Insider Monkey’s first quarter database, 15 hedge funds were long Innovative Industrial Properties, Inc., compared to 14 funds in the prior quarter. Stuart J. Zimmer’s Zimmer Partners is the largest stakeholder of the company, worth $142.6 million. 

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

Number of Hedge Fund Holders: 24

The Scotts Miracle-Gro Company is engaged in the production, promotion, and distribution of products targeted at lawn and garden care, as well as indoor and hydroponic gardening. The company has leveraged its expertise in horticulture and gardening to develop innovative technologies and solutions for cannabis cultivation. This includes advanced lighting systems, hydroponic equipment, and other tools designed to optimize growing conditions and maximize yields. It is one of the best marijuana stocks to invest in. 

On May 8, JPMorgan analyst Jeffrey Zekauskas upgraded The Scotts Miracle-Gro Company to Overweight from Neutral, while maintaining a price target of $80. In a research note to investors, the analyst stated that The Scotts Miracle-Gro Company’s cost pressure related to raw materials has subsided and is now expected to benefit significantly from lower prices of key raw materials. Scotts Miracle-Gro is a major purchaser of urea, potash, polyethylene, and diesel fuel, all of which are currently trading at considerably lower prices compared to 2022. The firm believes that Scotts Miracle-Gro is now an attractive investment option for those with a one-year time frame or a three- to five-year investment horizon.

According to Insider Monkey’s first quarter database, 24 hedge funds were bullish on The Scotts Miracle-Gro Company, compared to 27 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 592,947 shares worth $41.35 million. 

Madison Funds made the following comment about The Scotts Miracle-Gro Company in its Q4 2022 investor letter:

“Stock selection was the poorest for us in this sector. Two stocks in particular – Hain Celestial (HAIN) and The Scotts Miracle-Gro Company – while big winners for us in 2020 and 2021, hurt the portfolio in 2022.

While both companies were so-called COVID beneficiaries (businesses that benefited from consumers staying home and spending on their homes during COVID), we felt they possessed certain additional drivers that would maintain their fundamentals into 2022 and beyond.

Scott’s Miracle-Gro is arguably one of the great American franchises. The brand is synonymous with lawn care and pest control, has a dominant market share (~60%) with historically-impressive ~30% cash flow margins, and has the country’s largest Cannabis supply business. Scotts’ core business saw a significant windfall during COVID lockdowns. Lawn and garden care is not a growth business, and SMG dominance does not allow for much incremental gain in market share. However, our thesis was that even in a reopening scenario where lawn and garden businesses would revert to the mean, the cannabis market was poised for years of growth as more states legalized recreational use.

What we missed was the highly inefficient structure of the U.S. cannabis market. Currently, California, Colorado, and Michigan have the biggest and most mature markets. However, over the course of the last few years, several very large states and regions have voted to legalize recreational use, including New York, New Jersey, and Connecticut. The fly in the ointment has been Oklahoma, which is a medical marijuana state. Although recreational use is still prohibited, licenses to grow the crop were granted in Laissez Faire fashion to anyone willing to buy one. Oklahoma began to grow and cultivate the crop far in excess of their medical marijuana demand. That excess supply bled into grey markets across the country, devastating pricing for growers in other states. This glut put a near complete stop to capital spending on grow operations. With no new or incremental facilities coming on, Scotts’ Hawthorne business was cut in half from its peak in F21. This, of course, had a devastating effect on the stock.”

1. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)

Number of Hedge Fund Holders: 40

Jazz Pharmaceuticals plc (NASDAQ:JAZZ), as a pharmaceutical company, primarily focuses on the development and commercialization of innovative therapies in different therapeutic areas. Utilizing its GW Cannabinoid Platform, Jazz Pharmaceuticals plc (NASDAQ:JAZZ) holds a prominent position in the field of cannabinoid science. The company strongly believes in the potential of cannabinoid medicines to bring about therapeutic advancements and fundamentally transform the way patients manage their frequently neglected illnesses. It is one of the prominent marijuana stocks to monitor. 

On May 11, Needham analyst Ami Fadia increased the firm’s price target on  Jazz Pharmaceuticals plc (NASDAQ:JAZZ) from $205 to $212 while maintaining a Buy rating on the shares. Despite the company’s Q1 results falling below consensus due to increased operating expenditure and tax rate, the analyst highlighted that all aspects of  Jazz Pharmaceuticals plc (NASDAQ:JAZZ)’s 2023 guidance were reaffirmed. Fadia believes that the company’s strong execution can persist, and also notes that Jazz Pharmaceuticals is favorably positioned for corporate development initiatives.

According to Insider Monkey’s first quarter database, 40 hedge funds were long  Jazz Pharmaceuticals plc (NASDAQ:JAZZ), compared to 38 funds in the prior quarter. Bernard Horn’s Polaris Capital Management is the biggest stakeholder of the company, with 1.30 million shares worth $191.3 million. 

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This article is originally published at Insider Monkey.