In this article, we discuss the best CBD stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best CBD Stocks To Buy Now.
Cannabidiol, also known as CBD, is a chemical compound commonly found in marijuana. CBD can be derived from hemp or non-hemp plants. It is an active ingredient in cannabis, one of the most prominent recreational drugs across the world. According to the United States government, marijuana is the most commonly used drug in the US. Nearly 48 million people across the country have used it at least once since 2019. This figure comprises nearly 18% of the total population in the United States.
Although marijuana is still illegal in many US states, there has been a massive push towards the legalization of the drug. This is due to the incredible popularity of the drug as well as new research which sheds light on the medical benefits of using it. Last year, US President Joe Biden, in line with his promises made during the presidential campaign of 2020, asked the Health Department to reconsider whether the classification of cannabis as a Schedule I drug under the Controlled Substances Act was appropriate, given the medical research on the topic.
Schedule 1 drugs – like heroin and LSD – are generally defined as drugs that have no accepted medical usage and also have a high potential for abuse. Schedule III drugs, as marijuana is beginning to be classified under new regulations, are defined as drugs with a moderate to low potential for physical and psychological dependence. As more states legalize marijuana, cannabis firms like Tilray Brands, Inc. (NASDAQ:TLRY), Innovative Industrial Properties, Inc. (NYSE:IIPR), and Canopy Growth Corporation (NASDAQ:CGC) look set to pop.
In late September this year, the Senate Banking Committee approved the passage of a new bill to the Senate floor. This bill, named The Secure and Fair Enforcement Regulation (SAFER) Banking Act, aims to provide legal cover to banks and other financial institutions who provide services to marijuana companies in states where the drug has been legalized. The bill had been introduced by a bipartisan group of lawmakers, highlighting the support that legalization of marijuana enjoyed on both sides of the aisle.
In August this year, in line with directives of US President Biden, issued a recommendation to the Drug Enforcement Administration that marijuana be reclassified from a Schedule I to a Schedule III drug. The stocks of CBD firms have been soaring since. Latest market research by Technavio reveals that the cannabis market in the US will grow at an astonishing rate of more than 24% in the next four years. This represents an increase of almost $50 billion in the period between 2022 and 2027.
Investors who are eager to profit from this boom for CBD stocks should take a deeper dive into the business models of CBD firms. Recent statements made by Irwin Simon, the CEO of Tilray Brands, Inc. (NASDAQ:TLRY), provide helpful context. During the first quarter earnings call for the 2024 fiscal year, Simon outlined that his company was working to deliver industry-leading, profitable growth and sustainable long-term shareholder value for investors by focusing on core fundamentals.
“Tilray is No. 1 in cannabis flower, oils, concentrates, and THC beverages, and No. 2 in pre-rolls, No. 4 in vape, and the top 10 in all other categories.Aggregate all categories in either inhalable or ingestibles, Tilray is No. 1 in both of these groups. We grew international cannabis revenue by 37%, and we are the market leader in medical cannabis across Europe with leading market shares in Germany, Poland, and Luxembourg. We are a leader in the hemp food industry with a 52% branded market share with Manitoba harvest in the U.S.and Canadian market share of nearly 80%. With our recent acquisition of eight craft beer and beverage brands from Anheuser-Busch, we are growing fast in the craft beverage alcohol industry, solidifying our leadership position as the fifth-largest U.S. craft beer brewer with 5% market share in a growing market. And since year-end, we paid down $177 million of our debt.
The balance we have brought to our business model by going beyond cannabis has given us a strong position today and is positioning us well for higher growth future opportunities, including when U.S. federal cannabis legalization and German legalization of adult-use cannabis happens. We believe we’re in a great place going forward, well positioned with the resources, infrastructure, and operations, the distribution of brands, sales and marketing, and know-how to lead the revolution of cannabis CBG into the American and European mainstream. Cannabis was our largest segment by net revenue and comprised of approximately 40% of the total revenue. Gross revenue from Canadian adult-use cannabis increased 22% driven by innovation and share growth in dried flower, vapes, and pre-roll. This was achieved both organically and as a result of our recent acquisitions.”
Our Methodology
The companies that operate in the cannabis sector were selected for the list. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm.
A cannabis industry professional using software as a service-based tools to streamline operations.
Best CBD Stocks To Buy Now
12. SNDL Inc. (NASDAQ:SNDL)
Number of Hedge Fund Holders: 3
SNDL Inc. (NASDAQ:SNDL) is a Canada-based firm that markets cannabis products. On November 13, SNDL Inc. (NASDAQ:SNDL) posted earnings for the third quarter of 2023, reporting a revenue of C$237 million, up more than 3% compared to the revenue over the same period last year.
At the end of the third quarter of 2023, 3 hedge funds in the database of Insider Monkey held stakes worth $1.3 million in SNDL Inc. (NASDAQ:SNDL), compared to 2 the preceding quarter worth $1.2 million.
Just like Tilray Brands, Inc. (NASDAQ:TLRY), Innovative Industrial Properties, Inc. (NYSE:IIPR), and Canopy Growth Corporation (NASDAQ:CGC), SNDL Inc. (NASDAQ:SNDL) is one of the best CBD stocks to buy now.
11. Clever Leaves Holdings Inc. (NASDAQ:CLVR)
Number of Hedge Fund Holders: 4
Clever Leaves Holdings Inc. (NASDAQ:CLVR) operates in the botanical cannabinoid and nutraceutical industries. On November 9, Clever Leaves Holdings Inc. (NASDAQ:CLVR) posted earnings for the third quarter of 2023, reporting a revenue of $3.8 million, up more than 15% compared to the revenue over the same period last year.
At the end of the third quarter of 2023, 4 hedge funds in the database of Insider Monkey held stakes worth $10,000 in Clever Leaves Holdings Inc. (NASDAQ:CLVR), compared to 6 in the previous quarter worth $351,000.
10. Organigram Holdings Inc. (NASDAQ:OGI)
Number of Hedge Fund Holders: 4
Organigram Holdings Inc. (NASDAQ:OGI) engages in the production and sale of cannabis and cannabis-derived products in Canada. In mid-August, Organigram Holdings Inc. (NASDAQ:OGI) had announced that it had entered into a supply agreement to provide medical cannabis flower to UK-based 4C LABS.
At the end of the third quarter of 2023, 4 hedge funds in the database of Insider Monkey held stakes worth $336,000 in Organigram Holdings Inc. (NASDAQ:OGI), compared to 5 in the previous quarter worth $808,000.
9. Village Farms International, Inc. (NASDAQ:VFF)
Number of Hedge Fund Holders: 4
Village Farms International, Inc. (NASDAQ:VFF) markets agricultural products. On November 9, investment advisory Craig-Hallum upgraded Village Farms International, Inc. (NASDAQ:VFF) stock to Buy from Hold with a price target of $1, identifying the company as one of the best bets in cannabis given significant multi-year growth opportunities for cannabis.
At the end of the third quarter of 2023, 4 hedge funds in the database of Insider Monkey held stakes worth $243,000 in Village Farms International, Inc. (NASDAQ:VFF), compared to 5 in the preceding quarter worth $250,000.
8. Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)
Number of Hedge Fund Holders: 6
Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) makes and sells agricultural equipment and supplies. On November 9, Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) posted earnings for the third quarter of 2023, reporting a revenue of around $54 million. The firm said net sales stood at approximately $230 million to $240 million.
At the end of the third quarter of 2023, 6 hedge funds in the database of Insider Monkey held stakes worth $1.6 million in Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM), compared to 5 the preceding quarter worth $1.4 million.
7. GrowGeneration Corp. (NASDAQ:GRWG)
Number of Hedge Fund Holders: 7
GrowGeneration Corp. (NASDAQ:GRWG) owns and runs retail hydroponic and organic gardening stores. On November 9, investment advisory Stifel maintained a Hold rating on GrowGeneration Corp. (NASDAQ:GRWG) stock and lowered the price target to $2.85 from $3.50, noting that amid any potential sector consolidation, the company was best positioned and faced the least risk of not participating.
At the end of the third quarter of 2023, 7 hedge funds in the database of Insider Monkey held stakes worth $3.2 million in GrowGeneration Corp. (NASDAQ:GRWG), the same as in the previous quarter worth $7.8 million.
6. Cronos Group Inc. (NASDAQ:CRON)
Number of Hedge Fund Holders: 8
Cronos Group Inc. (NASDAQ:CRON) makes and sells hemp-derived supplements and cosmetic products. On November 27, Cronos Group Inc. (NASDAQ:CRON) announced a sale and leaseback agreement with vertical farming firm Future Farmco Canada. Under the terms of the sale agreement, the buyer agreed to acquire the property for C$23 million.
Among the hedge funds being tracked by Insider Monkey, Delaware-based investment firm Chescapmanager LLC is a leading shareholder in Cronos Group Inc. (NASDAQ:CRON) with 8.3 million shares worth more than $16 million.
In addition to Tilray Brands, Inc. (NASDAQ:TLRY), Innovative Industrial Properties, Inc. (NYSE:IIPR), and Canopy Growth Corporation (NASDAQ:CGC), Cronos Group Inc. (NASDAQ:CRON) is one of the best CBD stocks to buy now.
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Disclosure. None. 12 Best CBD Stocks To Buy Now is originally published on Insider Monkey.