Top cannabis stocks in May include SNDL Inc., TerrAscend Corp., and Curaleaf Holdings Inc., which together lead the industry in revenue growth even as a crowded field of competitors and a thriving illicit market hamper sales.
The ETFMG Alternative Harvest ETF (MJ), a proxy for cannabis stock performance, slid 53% in the last year, and even the best-performing weed stock dropped 28% in the same period, compared with a 3% increase in the large-capitalization Russell 1000 Index.
Cannabis sales across the U.S. have slowed since an early-pandemic boom, contributing to oversupply and forcing retailers to cut prices. Licensed retailers also face competition from the illegal market and must navigate the patchwork of laws restricting cannabis use across the U.S.
We look in more detail below at the top cannabis stocks in three categories: best value, fastest growth, and best stock performance. Benchmark performance data above is as of May 9, while all figures below are as of May 7, 2023.
Best Value Cannabis Stocks
Here are the cannabis stocks with the lowest 12-month trailing price-to-sales (P/S) ratio, a rough measure of companies in the early stages of development that could eventually produce more profit when they achieve (or return to) profit. The ratio shows how much you’re paying for the stock for each dollar of sales generated.
| Best Value Cannabis Stocks |
| |
Price ($) |
Market Capitalization ($M) |
12-Month Trailing P/S Ratio |
| Cresco Labs Inc. (CRLBF) |
1.68 |
506.1 |
0.6 |
| SNDL Inc. (SNDL) |
1.73 |
450.0 |
0.7 |
| Trulieve Cannabis Corp. (TCNNF) |
5.78 |
1,064.6 |
0.9 |
| Curaleaf Holdings Inc. (CURLF) |
2.80 |
2,012.3 |
1.5 |
| Canopy Growth Corp. (CGC) |
1.34 |
698.1 |
1.7 |
Source: YCharts
Fastest-Growing Cannabis Stocks
These are the cannabis stocks with the highest year-on-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to increase revenue organically or through other means and find growing companies that haven’t yet reached profitability. In addition, accounting factors that may not reflect the overall strength of the business can significantly influence earnings per share (EPS). However, sales growth alone doesn’t guarantee a strong business because a company must also control costs.
| Fastest-Growing Cannabis Stocks |
| |
Price ($) |
Market Cap ($M) |
Revenue Growth (%) |
| SNDL Inc. (SNDL) |
1.73 |
450.0 |
882 |
| TerrAscend Corp. (TRSSF) |
1.81 |
494.9 |
101.1 |
| Curaleaf Holdings Inc. (CURLF) |
2.80 |
2,012.3 |
14.2 |
| Verano Holdings Corp. (VRNOF) |
3.21 |
1,024.3 |
12.4 |
| Green Thumb Industries Inc. (GTBIF) |
8.58 |
2,032.1 |
6.4 |
Source: YCharts
Cannabis Stocks With the Best Performance
These are the cannabis stocks that had the smallest declines in total return over the past 12 months among the companies we examined.
| Cannabis Stocks With the Best Performance |
| |
Price ($) |
Market Cap ($M) |
12-Month Trailing Total Return (%) |
| Green Thumb Industries Inc. (GTBIF) |
8.58 |
2,032.1 |
-28.2 |
| Cronos Group Inc. (CRON) |
2.01 |
765.4 |
-33.2 |
| Tilray Brands Inc. (TLRY) |
2.77 |
1,711.9 |
-43.4 |
| Curaleaf Holdings Inc. (CURLF) |
2.80 |
2,012.3 |
-49.1 |
| TerrAscend Corp. (TRSSF) |
1.81 |
494.9 |
-52.1 |
| Russell 1000 Index |
N/A |
N/A |
2.9 |
| ETFMG Alternative Harvest ETF (MJ) |
N/A |
N/A |
-52.9 |
Source: YCharts
Trends to Watch in Cannabis Stocks
Marijuana stocks have given investors a wild ride over the past few years, staging both big rallies and substantial declines. Those who invest in them should monitor these key trends, as they will likely guide price direction in the months and years ahead.
Financing: Most U.S. financial institutions avoid funding cannabis companies, as marijuana is still federally illegal, meaning lenders that provide loans could face possible prosecution. However, the Secure and Fair Enforcement Banking Act (SAFE)—which passed in the U.S. House of Representatives in 2021—aimed to address this by preventing the federal government from penalizing banks that offer financial services to the cannabis industry. Although the legislation failed to gain support in the Senate, investors should monitor any future legislation that may have a similar bent.
Merger & acquisition: Merger & acquisition (M&A) transactions in the U.S. cannabis industry hit a record $10.3 billion in 2021 before dropping off to about $3 billion in 2022, reflecting the year’s suboptimal market conditions. Increased dealmaking in 2023 could indicate that institutional investors have growing confidence in the cannabis industry’s future.
Potential U.S. legalization: While several cannabis legalization bills are floating around the halls of Congress, bipartisan support remains difficult to achieve, creating a large amount of uncertainty for industry participants.
Advantages of Cannabis Stocks
Despite the underwhelming performance of marijuana stocks over the past year, the sector offers risk-taking investors significant growth potential. According to industry analysis firm MJBizDaily, U.S. cannabis sales are projected to surpass $33 billion in 2023 before reaching almost $57 billion by the end of 2028. Moreover, the global cannabis market is expected to reach nearly $200 billion by 2028, up from $28 billion in 2021.
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The times-revenue method determines the maximum value of a company as a multiple of its actual revenue for a set period.
The S&P 500 Index (Standard & Poor’s 500 Index) is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S.
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