5 best cannabis stocks to buy for Q4 2023

By:

James Knight

James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.

 & 

Jayson Derrick

Jayson was the Lead News Editor at Invezz until 2023 overseeing the team of reporters, analysts and strategic direction of news content. He traded stocks professionally... read more.

Updated: May 3, 2023

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This guide picks out the best pot stocks to invest in this year. Read on to get our experts’ recommendations and find out why they’ve chosen these stocks.

What are the top weed stocks to buy?

The best stocks are listed in the table below. You can follow the links to find their up to date price information or scroll down for more information on why each one was chosen.

1. Canopy Growth Corp (NYSE: CGC)

Canopy Growth is a Canadian cannabis company and the largest weed stock in the world by market cap. Founded in 2013, it was the first public cannabis company in North America when it began selling shares on the Toronto Stock Exchange in 2018.

CGC’s stock price performance is indicative of the industry as a whole, with most of the activity coming over the last couple of years. It has regularly seen more than 100% growth in a short period of time, with similarly dramatic falls along the way. That’s often a reflection of the rising and falling hopes of cannabis being legalised by the federal government in the US.

Any investment in cannabis is in the hope that these companies will be able to operate in the United States. That requires federal legislation but carries the possibility of huge revenue streams when it happens. Canopy is one of the best places businesses to benefit, which is what’s earned it top spot on this list.

2. Tilray Inc. (NASDAQ: TLRY)

Tilray is another Canadian cannabis company. The current version of Tilray is the result of a merger with another leading player in the field, Aphria, which created a behemoth that dwarfs most other cannabis businesses in terms of revenue.

When it first began trading in 2018, TLRYs stock quickly soared up more than 500% to $150 per share. The last few years have been a story of steadily falling away from that high point as the company failed to live up to expectations.

Now, thanks to the merger, it’s in a much better place. Tilray now has its own revenue streams in Europe and a pharmaceutical distribution arm from Aphria along with its business in Canada. Alongside that, it has acquired some hemp products that can be sold in the US in order to build up its presence there. Those can help the company keep growing until it’s able to fully operate in the US.

3. Cronos Group Inc. (NASDAQ: CRON)

Cronos Group is headquartered in Canada but supplies and produces cannabis across five continents. With six brands and four production centres, it has a large portfolio that means it isn’t entirely reliant on the US government legalising cannabis, as some other companies in the field are.

One of the biggest drivers of a stock price move in weed stocks comes from legalisation efforts in the US. The Cronos price is one of the best examples of this phenomenon, as its surge in early 2019 came after the passage of a bill that allowed farmers to grow industrial hemp. A similar, smaller, jump followed the election of a Democrat to the White House, as that party is seen as more likely to legalise cannabis.

A big reason to be bullish about the future is because Cronos has a steady stream of cash, thanks to the fact it’s part-owned by the Tobacco giant, Altria. Pot companies are often cash-strapped and money is king: at the moment the industry is built on spending big now in order to make profit in the future. Cronos is well-placed to do just that.

4. Aurora Cannabis Inc. (NYSE: ACB)

Aurora is yet another Canadian company with cannabis operations across the globe. It’s the second largest company in the industry by market cap and either produces or sells cannabis in 25 countries.

It performed extremely well in 2018 and 2019, with the stock price up more than 300% in that time. Since then, it’s been a much tougher road, as its shares have fallen from above $100 to less than $10 apiece. A combination of rising costs and missing profit guidance has scared investors off.

The bullish case for Aurora revolves around its sheer production capacity. It could be a classic case of a company that has to absorb blows now to profit later. It might be a more risky play than any of the companies above it on this list but it can ramp up its volumes quickly across a range of product areas.

5. Curaleaf Holdings (OTCQX: CURLF)

The fifth Canadian company on this list, Curaleaf is one of the world’s largest cannabis companies by revenue. Its main focus is the growth, manufacturing and distribution of cannabis and it sells most of its products through third party suppliers.

Curaleaf was first formed in 2014 but has been public since 2018. Like most cannabis companies at the moment, it doesn’t make any money, but it has been making a big effort to expand its operations in the United States. That’s led to an avalanche of acquisitions over the last couple of years to add new products and growing centres to the mix.

In addition to the US coverage, Curaleaf has expanded its operations into Europe as well. Again, through acquisitions, it can now supply large potential markets in the UK and mainland Europe. That gives it a broad potential revenue stream and could make it one of the safer investments you can make in cannabis.

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What is a weed stock?

A company that’s involved in the production or sale of cannabis. That might mean owning the farms that grow it, or turning the plant into a consumable good, or being the one that sells it to customers. Often companies involved in the industry do some combination of all three and their products include things like medicinal cannabis, CBD oil and hemp.

Are cannabis shares a good investment?

They can be but they tend to be quite volatile and a lot of their potential is based on the assumption that weed will be legalised across the world. While that is happening, the pace of change can be slow and so the stocks tend to rise and fall on small nuggets of news.

What that means in practice is that they can be a good investment if you understand the risks and don’t pin all your hopes on one company. As with all portfolios, the best way to be successful is to have balance, so think about spreading your money out across a few different companies in the cannabis industry along with more traditional stocks.

As legalisation is such a crucial aspect of the market, you have to follow any new updates so that you can react accordingly. You should expect some volatility as a matter of course, but use our latest news articles to help you stay informed so that you can plan your moves accordingly.