In this article, we are going to discuss the 7 best CBD stocks to invest in right now.
An essential component of medical marijuana, CBD is the legal, non-psychoactive compound that is used to treat chronic pain, anxiety, and other ailments. Though initially met with skepticism, medical cannabis is rapidly gaining traction in the United States and as of the writing of this article, the use of marijuana for medical purposes is legal in 39 states, in addition to the District of Columbia. The latest state to join the growing list was Nebraska, which voted to legalize and regulate medical cannabis in November 2024.
READ ALSO: 12 Best Brewery Stocks to Buy According to Hedge Funds
Despite the growth, 2024 was overall a very turbulent year for the American cannabis sector. The decriminalization process is going slower than expected and legalization ballot measures in Florida, and South and North Dakota failed to pass. Wholesale prices are also at record lows and despite all the efforts, the legal industry still faces stiff competition from the unregulated black market. As a result, the American Cannabis Operator Index, which tracks the market value of firms in the industry, has fallen by over 50% since a year ago, and more than 90% since its peak in April 2019. A recent survey by Whitney Economics revealed that only 27.3% of cannabis operators nationwide are profitable. According to the US Chamber of Commerce, 65.3% of all small businesses in the US are profitable, so the cannabis sector is trailing far behind the national average.
A recent encouraging development came when President-elect Donald Trump publicly expressed support for recreational cannabis legalization efforts in his home state of Florida. He also backed up the industry’s access to the banking system and the ongoing federal cannabis rescheduling process. Whether this support will actually translate into wide-reaching cannabis reform remains to be seen. However, it puts to rest any previous concerns that Donald Trump could actually cancel the rescheduling process altogether if he gets re-elected since the process is under the purview of the US Department of Justice.
The US Cannabis Council, expressing its optimism for the sector under Trump’s presidency, stated:
“The cannabis community has every reason to be optimistic with President Trump returning to the White House. He has endorsed the SAFE Banking Act and reclassification of cannabis. We look forward to working with his administration to advance meaningful federal reform.”
That said, the withdrawal of Matt Gaetz, a vocal proponent of federal legalization, as Trump’s nominee for attorney-general after allegations of sexual misconduct was highly discouraging for the country’s cannabis advocates. Moreover, a great deal of reforms will still have to get through both the House and the Senate, which will require some level of bipartisan cooperation.
As for the federal cannabis rescheduling process, the Drug Enforcement Administration held preliminary hearings on the matter in December and these are expected to conclude in March. Perhaps the most significant relief from the change will come in the form of tax reform. Currently, companies selling cannabis cannot deduct normal business expenses from their tax bill, costing them more than $2.2 billion in extra taxes than what would be paid if they were treated as mainstream businesses. If federal rescheduling happens, it is expected to improve the overall cash flow of the industry by $3.1 billion in 2026, helping improve the profitability of cannabis companies and giving their investors some much-needed optimism, even if Trump’s other promises go up in smoke.
With that said, here are the Best CBD Marijuana Stocks to Buy Now.
A cannabis industry professional using software as a service-based tools to streamline operations.
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 7 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 CBD Stocks According to 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).
7. Aurora Cannabis Inc. (NASDAQ:ACB)
Number of Hedge Fund Holders: 6
As one of the world’s leading cannabinoid companies, Aurora Cannabis Inc. (NASDAQ:ACB) has a long history of developing and producing cannabis-based medicines. The company has developed more than 200 different medical products from cannabis and is the leading provider of medical marijuana to Canadian patients – a market worth over $250 million in fiscal year 2023-24.
Based in Edmonton, Aurora Cannabis Inc. (NASDAQ:ACB) has evolved into an international medical-cannabis powerhouse and enjoys a presence across Canada, Europe, Australia, and South America. The company remains committed to further expanding its global footprint and recently announced a distribution partnership between MedReleaf Australia, its wholly owned subsidiary, and The Entourage Effect. The latter provides comprehensive distribution and support services to pharmacies in the Land Down Under and will serve as a wholesaler for MedReleaf Australia’s leading portfolio of products. Aurora ranks number two in Australia, which is emerging as the largest medical market in the world outside of North America, sized at around $250 million annually according to the Pennington Institute. The company is now aiming to expand its sales also into New Zealand, a smaller but important emerging market in its own right.
Aurora Cannabis Inc. (NASDAQ:ACB) maintains a world-class research and genetics facility in Canada and remains focused on developing and expanding its portfolio of products. The company recently announced several new medical product advancements, in addition to the innovations in its recreational lineup.
Aurora Cannabis Inc. (NASDAQ:ACB) had a strong fiscal Q2 2025, with a total net revenue of $81.1 million, up 29% YoY. Its flagship Global Medical Cannabis segment grew 41% YoY and generated 76% of the total revenue and 98% of the adjusted gross profit. This clearly demonstrates Aurora’s commitment to capitalizing on high-margin international opportunities, especially after the maturation we have witnessed in the maturing Canadian market. The company also maintained zero debt in its cannabis business and ended the quarter with approximately $152 million in cash and cash equivalents
6. Village Farms International, Inc. (NASDAQ:VFF)
Number of Hedge Fund Holders: 6
Ranking at number 6 in our list of the Best Marijuana Stocks to Invest in is Village Farms International, Inc. (NASDAQ:VFF), 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 and ranks among the best-selling brands in Canada.
Village Farms International, Inc. (NASDAQ:VFF) exports medical cannabis from Canada to Australia, Germany, the United Kingdom, and Israel. The company’s exports increased 111% YoY in Q3 2024, with continued improvement in sales to its German, Australian, and UK partners. The company also owns 85% of Leli Holland, a recreational marijuana grower based in the Netherlands, and recently commenced cultivation in the country. Sales are set to begin during the first quarter of 2025, allowing Aurora to generate additional annual revenues of approximately $12.4 million by effectively catering to a market with no excise tax and much more favorable product pricing.
Village Farms International, Inc. (NASDAQ:VFF) has long prioritized sustainability and its cutting-edge greenhouses use less water, land, and chemicals. This commitment was exemplified through the establishment of the VF Clean Energy subsidiary a decade ago, which converted landfill gas into clean energy and provided electricity for BC Hydro. Over time, the company transitioned to a renewable natural gas (RNG) model and its Delta RNG facility became operational last year, with royalty payments now being received to provide a healthy stream of profits.
Village Farms International, Inc. (NASDAQ:VFF) has increased its revenue by 17% per year for the last five years. This trend continued in Q3 2024, when the company’s total sales increased by 20% YoY to $83.4 million, beating the analysts’ estimates by around $2.8 million. 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 in 2023.
