In this piece, we will take a look at the 10 marijuana stocks to buy in 2022. If you want to skip over our industry overview and jump ahead to the top five stocks in this list, then take a look at the Top 5 Marijuana Stocks to Buy in 2022.
Marijuana or cannabis, commonly referred to as ‘weed’, was once considered a dangerous drug by governments and populations all over the globe. However, since then, public and government attitudes about the substance, which is primarily consumed in a plant form has changed. While originally criminalized in most Western nations, this shift in attitude has resulted in several countries changing their laws that had previously criminalized marijuana consumption.
One of these is Canada which had effectively legalized cannabis in 2018, bringing the laws regulating its usage in line with those that regulate alcohol consumption in the North American country. This created the potential of a legalized cannabis industry, through which legitimate businesses could market and sell the product to customers aged 18 and above. The initial development of the industry was slow, with reports indicating that the black market was outselling the white market by offering more distribution points and lower prices.
However, since then, the outlook has changed. For instance, a 2021 report by BNN Bloomberg outlined that in the three years since the legalization, the Canadian government had collected $1 billion in excise taxes from cannabis. Additionally, it also detailed that from the low hundreds, the number of marijuana and cannabis stores in Canada stood at 2,652 in 2021.
BNN’s figures are backed by the latest report from Deloitte Canada. The firm outlines that Cannabis sales since 2018 are now worth $11 billion, fueled by significant capital expenditures of $29 billion. Two-thirds of these figures represent recreational sales of the substance, and the bulk of the sales and expenditures are from Canada’s Ontario province. Deloitte also outlines that overall, the industry has contributed a whopping $43.5 billion to the Canadian Gross Domestic Product (GDP), with $25.2 billion being in the form of direct labor income.
The future outlook for the global cannabis industry is also strong if we go by a handful of research reports. One of these is from the research firm Quince Market Insights. In its report, released in July last year, Quince outlines that the industry is expected to have a compound annual growth rate (CAGR) of 27% from 2021 to 2030. The report estimated that the market was set to touch a value of roughly $20 billion by the end of 2021.
Another report, this time from Fortune Business Insights, outlined that the global Cannabis market was worth $20.47 billion in 2020 and had exhibited a remarkable annual growth rate of 50% during the time period. Fortune Business has an even stronger estimated CAGR for the cannabis sector, as it estimates that the industry will grow at a rate of 32.04% between 2021 and 2030. This will enable it to grow from an estimated value of $28.3 billion in 2021 to a whopping $198 billion as 2030 ends, believes the research firm. Some of the top companies that have made it on our list include Village Farms International, Inc. (NASDAQ:VFF), Trulieve Cannabis Corp. (OTCF:TCNNF), and Ayr Wellness Inc. (CNSX:AYR-A).
Therefore, we decided to take a look at some of the top performing marijuana stocks out there and see which companies pass the test.
Copyright: thommorrisphotography / 123RF Stock Photo
Our Methodology
In order to determine which stocks can perform well during 2022, we took a look at the Wall Street analyst consensus for several publicly listed cannabis firms. This enabled us to determine the upside that the analyst price targets have set for the companies, and allowed us to rank the firms. Once this was achieved, we then took a look at the firms’ earnings reports and other metrics such as hedge fund sentiment generated through Insider Monkey’s survey of 924 funds for the fourth quarter of last year.
10 Marijuana Stocks To Buy in 2022
10. TerrAscend Corp. (OTC:TRSSF)
Number of Hedge Fund Holders: 1
Stock Price as of Feb. 24, 2022: $5.61
Analyst Upside In %: 70%
TerrAscend Corp. (OTC:TRSSF) is a Canadian company that was established in 2017. It sells medicinal and other use cannabis in the United States and in Canada. Its dispensaries are located in the American states of Pennsylvania and California
TerrAscend Corp. (OTC:TRSSF)’s shares closed at $5.61 on February 24, 2022, and at the same time, Wall Street analysts had an average consensus share price of $9.53 for the company. This marks a 70% expected upside over the quoted closing share price.
As its fiscal third quarter came to an end in November last year, TerrAscend Corp. (OTC:TRSSF) had reported $49 million in revenue and $0.28 in EPS, missing analyst revenue estimates. Insider Monkey’s Q4 2021 survey of 924 hedge funds revealed that one had owned a stake in the company.
One of TerrAscend Corp. (OTC:TRSSF)’s largest investors according to the Insider Monkey database is Justin John Ferayorni’s Tamarack Capital Management. The fund owns 150,000 shares worth $917,000.
Alongside Trulieve Cannabis Corp. (OTCF:TCNNF), Village Farms International, Inc. (NASDAQ:VFF), and Ayr Wellness Inc. (CNSX:AYR-A), TerrAscend Corp. (OTC:TRSSF) is a great marijuana stock to look at.
9. Green Thumb Industries Inc. (OTC:GTBIF)
Number of Hedge Fund Holders: 3
Stock Price as of Feb. 24, 2022: $19.65
Analyst Upside In %: 78%
Green Thumb Industries Inc. (OTC:GTBIF) is an American company that also sells different types of cannabis products. Its product portfolio includes raw cannabis flowers as well as processed products such as edibles and concentrates. The company operates in its market through several brands and sells products in the United States through retail stores. It also expanded its store network in February by opening two new stores in Virginia.
Green Thumb Industries Inc. (OTC:GTBIF)’s share price as of February 24, 2022, was $19.65. When compared to the analyst consensus estimates of $34.93, this marks a 78% upside. Insider Monkey’s research involving 924 hedge funds in Q4 2021 indicated that three had owned the company’s shares.
For its fiscal Q3, Green Thumb Industries Inc. (OTC:GTBIF) beat analyst revenue estimates and missed those for GAAP EPS, by posting $233 million and $0.08 in the segments, respectively. Wolfe Research set an Outperform rating for the company’s shares in January 2022, stating that its expansion approach was balanced and could help Green Thumb Industries Inc. (OTC:GTBIF) grow customer loyalty.
Green Thumb Industries Inc. (OTC:GTBIF)’s largest investor is Nancy Zevenbergen’s Zevenbergen Capital Investments, suggests Insider Monkey’s research. The firm owns 110,715 shares worth $2.4 million.
8. OrganiGram Holdings Inc. (NASDAQ:OGI)
Number of Hedge Fund Holders: 9
Stock Price as of Feb. 24, 2022: $1.48
Analyst Upside In %: 93%
OrganiGram Holdings Inc. (NASDAQ:OGI) is a Canadian company that covers several kinds of cannabis products and their distribution channels. The company sells to both retailers and wholesalers in Canada. It sells medicinal products such as oils, flowers and vaporizers; recreational products under several brands, and other cannabis products such as edibles. In addition to the physical distribution mediums, OrganiGram Holdings Inc. (NASDAQ:OGI) also offers its products online and over the telephone.
OrganiGram Holdings Inc. (NASDAQ:OGI)’s closing share price on the 24th of February, 2022 was $1.48. This marks a 93% upside over the consensus analyst estimate of $2.85. 9 out of 924 hedge funds part of Insider Monkey’s Q4 2021 survey had owned the company’s shares.
OrganiGram Holdings Inc. (NASDAQ:OGI) posted strong revenue growth during its first fiscal quarter results that were posted in January 2022. This revealed that the company’s revenue of $30.38 million during the quarter marked a strong 57% annual growth and beat consensus estimates by $7.1 million. At the same time, its net loss also dropped significantly, as it stood at $1.3 million when compared to the year-ago quarter’s $34 million.
OrganiGram Holdings Inc. (NASDAQ:OGI)’s largest investor is Ken Griffin’s Citadel Investment Group. This is through a $3.7 million stake via 2.1 million shares.
7. Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)
Number of Hedge Fund Holders: 7
Stock Price as of Feb. 24, 2022: $19.82
Analyst Upside In %: 102%
Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM), while not directly a part of the cannabis industry, is still responsible for providing the sector with crucial equipment. The company manufactures and sells agricultural environmental control equipment in the United States and in Canada. This equipment ensures that companies that do grow the cannabis plants have a sound environment that is suitable for growth requirements. Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) is headquartered in Pennsylvania, United States.
Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)’s share price stood at $19.82 as trading came to a halt on February 24, 2022. Compared to the analyst price consensus of $40, the closing price marks a 102% upside. Truist lowered the company’s price target to $50 from $65 in January 2022 but kept a Buy rating on the shares. The firm outlined that while the industry’s outlook was not optimistic, the company will recover.
For its fiscal Q3, Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) revealed that it had brought in $123 million in revenue and $0.17 in non-GAAP EPS. This enabled it to beat analyst revenue estimates but miss those for the EPS. Out of the 924 hedge funds surveyed by Insider Monkey in Q4 2022, 7 had owned a stake in the company.
Ken Griffin’s Citadel Investment Group is Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)’s largest investor. It owns 223,928 shares that are worth $6 million.
Baron Funds mentioned Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) in its Q4 2021 investor letter. Here is what the fund said:
“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-singledigit 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.
6. GrowGeneration Corp. (NASDAQ:GRWG)
Number of Hedge Fund Holders: 12
Stock Price as of Feb. 24, 2022: $8.33
Analyst Upside In %: 138%
GrowGeneration Corp. (NASDAQ:GRWG) is an organic gardening and hydroponic equipment provider in the United States. This equipment covers several items such as humidifiers, fixtures, seeds, water pumps, and filters. The company is headquartered in Greenwood Village, Colorado.
As trading came to an end on February 24, 2022, GrowGeneration Corp. (NASDAQ:GRWG)’s shares were trading at $8.33, for a 138% upside over an analyst consensus of $19.83.
GrowGeneration Corp. (NASDAQ:GRWG) reported $116 million in revenue and $0.07 in GAAP EPS for its fiscal Q3, allowing it to beat analyst revenue estimates but miss them for the EPS. Insider Monkey’s hedge fund research covering 924 hedge funds in Q4 2021 outlined that 12 had owned the company’s shares.
GrowGeneration Corp. (NASDAQ:GRWG)’s largest investor is Jim Simons’ Renaissance Technologies who owns 818,115 shares worth $10 million.
GrowGeneration Corp. (NASDAQ:GRWG) is part of our list of top marijuana stocks, with some of the others being Ayr Wellness Inc. (CNSX:AYR-A), Trulieve Cannabis Corp. (OTCF:TCNNF), and Village Farms International, Inc. (NASDAQ:VFF).
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Disclosure: None. Top 10 Marijuana Stocks to Buy in 2022 is originally published on Insider Monkey.
