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7 Best Marijuana Stocks to Buy

Time to pick up some cheapies for the next MAJOR Leg up and it could happen any time!

"We remain optimistic about cannabis stocks, and we think that these dips should generally be bought," New Cannabis Ventures analysts said in a recent newsletter.

Bargain hunters looking to buy and hold should consider these weed stocks.

By Matt Whittaker
Edited by Jordan Schultz
March 2, 2023, at 4:04 p.m.

U.S. News & World Report
7 Best Marijuana Stocks to Buy in 2023

Marijuana Farm Industry - weed and commercial cannabis. Close up of Cannabis Cultivation.Marijuana Farm Industry - weed and commercial cannabis. Close up of Cannabis Cultivation.
Like many firms in other industries, cannabis companies have been struggling with high inflation adding to their costs. But marijuana companies also face a host of headwinds unique to them.

Stocks of legal marijuana companies are in a slump, and the near-term outlook is hazy.

But while 2023 might not be a year to buy in expectation of rapid gains, this could be a great entry point for purchasing some solid cannabis stocks at a discount and holding them in anticipation of eventual federal legalization in the U.S., the world's biggest pot market.

The New Cannabis Ventures global cannabis stock index is down about 65% over the past year through March 1, compared with a roughly 10% slide for the broader market, as measured by the S&P 500.

"We remain optimistic about cannabis stocks, and we think that these dips should generally be bought," New Cannabis Ventures analysts said in a recent newsletter.

These are the top marijuana stocks to buy:

Green Thumb Industries Inc. (ticker: GTBIF)
Curaleaf Holdings Inc. (CURLF)
Trulieve Cannabis Corp. (TCNNF)
Verano Holdings Corp. (VRNOF)
Cresco Labs Inc. (CRLBF)
Cronos Group Inc. (CRON)
Aurora Cannabis Inc. (ACB)
Headwinds for Cannabis Stocks

Like many firms in other industries, cannabis companies have been struggling with high inflation adding to their costs. But marijuana companies also face a host of headwinds unique to them, including competition from the illegal market and falling prices for marijuana because of competition and oversupply.

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In Canada, despite federal legality, the industry has been weighed down by high taxes. In the U.S., where the drug remains federally illegal, taxes are also high, and the industry faces onerous hurdles to financing from banks. Because of federal illegality in the U.S., plant-touching companies can't list on major exchanges, and many institutional investors don't want to buy shares of companies trading over the counter, limiting marijuana firms' ability to raise money.

"In the U.S., the industry continues the challenge of operating under the shadows of federal law, and uncertainty as to the nature, extent and timing of federal reform continues to weigh on investor sentiment," said Matt Karnes, founder of consultancy GreenWave Advisors LLC, adding that some cannabis companies pay upward of 70% of their operating cash in taxes.

In the face of federal prohibition, investors worry about the future of many of the public companies unless they get bought or receive outside capital, he said.

"From a stock perspective, the marijuana industry has not experienced the same bounce back that other beaten-down sectors have experienced since the market's bottom in October," said Tom Bruni, senior writer for The Daily Rip & Markets newsletter at Stocktwits. "Part of that is because, from a regulatory or business standpoint, there have yet to be any significant catalysts to spark a renewed interest in the space."

Considering Multistate Operators
For investors trying to gain exposure to weed through cannabis stocks, large marijuana companies that operate in more than one U.S. state where the drug is legal – known as multistate operators, or MSOs – offer advantages for those willing to buy shares and hold them for what will likely be a considerable time.

Top-tier MSOs depend less on outside capital, Karnes said. They also trade at significant discounts to expected revenue and earnings before interest, taxes, depreciation and amortization, "offering an attractive entry point for long-term investors."

A silver lining for operators in mature markets facing slowing sales growth is that falling marijuana prices because of competition and oversupply should help the legal market compete with the illicit one, according to Jason Wilson, cannabis research and banking expert at ETF Managers Group. While that might not move the needle for share prices in 2023, it should be beneficial in the longer term, he said.

"Notwithstanding some regional bumps in the road, overall, sales across both the domestic and global markets are expected to continue to experience strong growth," he said.

According to cannabis market research company BDSA, global legal cannabis spending will grow at a compound annual growth rate of 13.2% from 2022 to 2027, when the market size will hit $59.6 billion. The firm expects legal U.S. cannabis sales to grow 14% by the end of 2023 despite economic uncertainty and rising inflation.

According to Bruni, continued consolidation could also be a longer-term positive for the industry:

https://money.usnews.com/investing/stock-market-news/slideshows/best-marijuana-stocks-to-buy#:~:text=According%20to%20cannabis%20market%20research,size%20will%20hit%20%2459.6%20billion.