6 Best Marijuana Stocks for 2023: Your Cannabis Investing

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The marijuana sector is lighting up — and not just on 4/20. With New Jersey legalizing sales and New York licensing suppliers to begin growing products on farms last year, a push for federal legalization and Benzinga holding cannabis conferences, investor sentiment around the best stocks in marijuana is rising.

Legal cannabis sales reached $27 billion last year, according to the Brightfield Group, and could hit $40.5 billion by 2025. If you’re looking to invest in marijuana, look for companies that do their own growing and pay attention to location — companies based in states that don’t add to overhead costs are likely to see higher profits.

Top Marijuana Stocks

So are there any marijuana stocks to buy? These six are a good place to start.

1. Green Thumb Industries

Green Thumb Industries, which owns retail cannabis stores in 15 markets across the U.S. and operates 18 manufacturing facilities, is a stock investors should watch.

With the highest market capitalization on this list, Green Thumb Industries has established itself as a leader in the market. After considerable growth in 2020, it lost traction in 2022 — a slump that affected most cannabis stocks — but it still has a 12-month price target of $12.44, over an 80% increase from the current price.

2. Greenlane Holdings

Greenlane Holdings, which develops and distributes cannabis accessories, child-resistant packaging and vape solutions, is one to watch in volatile markets, according to MarijuanaStocks. The company’s fourth-quarter 2022 net sales fell 17.4% year over year.

While the stock has been down, buying the dip will put investors in a position to eventually see a sizable return when marijuana stocks do begin to recover.

3. Tilray

Another stock where investors could buy the dip is Tilray. While the stock has been down, the company recently reported a slight increase in net revenue, from $144.1 million to $145.6 million year over year.

However, the big news was the announcement that Tilray will acquire HEXO Corp., a consumer packaged goods cannabis company, in a $56 million deal expected to close in June. The company is already diversified, selling hemp-based foods and craft beverages in addition to its cannabis offerings.

4. Trulieve Cannabis

Trulieve Cannabis is a cannabis grower and retailer that focuses primarily on the Florida medical marijuana market. The company dominates in the Sunshine State with 120 dispensaries — more than double the number owned by its nearest competitor, MuV, according to MJBizDaily. Trulieve reported record full-year revenue of $1.24 billion in 2022.

Trulieve acquired Harvest Health & Recreation in 2021 in a deal that made it the biggest cannabis company in the U.S. at the time.

5. GrowGeneration

Experts also note that in addition to “pure” marijuana stocks, there is also a whole microcosm of satellite companies in the sector that are worth watching — and the booming U.S. cannabis industry has created fast-growing demand for hydroponics supplies of which GrowGeneration is an ancillary provider.

The company reports it is the largest specialty retail chain focused on the cannabis market, operating hydroponic and organic garden centers in 61 locations across 17 states. In addition to its retail space, the company distributes products directly to farms and offers financing on equipment.

GrowGeneration’s annual revenues increased 119% to $422.5 million in 2021 but fell over 34% last year. While acknowledging uncertainty within the industry, the company expects to see revenue growth this year, beginning in the first quarter.

6. SNDL Inc. (Sundial Growers)

If you’re not looking for a large investment, SNDL — formerly Sundial Growers — is another stock worth watching. Trading at under $2 per share, “it could be a secret weapon for marijuana investors,” according to InvestorPlace. The company not only grows and sells product but is also invested in banking, providing financing to other cannabis outfits.

After trading below Nasdaq’s minimum $1 share price for over 30 days last year, the company did a one-for-10 reverse split in an effort to avoid delisting. Shares were trading at $1.37 on April 26.

Do Marijuana Stocks Have a Future?

The future looks bright for marijuana stocks. MJBizDaily reported an economic impact of $90 billion in 2022, which is estimated to increase to $100.8 billion in 2023 and $170.7 billion by 2028. As more states legalize cannabis use for both medical and recreational purposes, it is likely that the industry will continue to expand.

Improving technology will also play a role — as operational and energy costs decrease and crop yields increase, profit margins improve.

Keep in mind that all investing comes with risk, so while marijuana stocks could be a good addition to your portfolio, don’t invest more than you can afford to lose.

Daria Uhlig and Amber Barkley contributed to the reporting for this article.

Prices are accurate as of market closing on April 26, 2023.

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