Even if the federal government won’t recognize the industry, the public already does. A 2018 Gallup poll found that 66 percent of Americans now support legalization (up from just 12 percent in the 1960s). And with U.S. cannabis retail sales expected to rise by 35 percent in 2019 and hit $30 billion by 2023, it’s no wonder that respected institutions like Harvard University and the Massachusetts Institute of Technology have already moved forward with cannabis programs.
Already two out of three Americans live in states that have some type of legalized cannabis (33 states with some form of legalization and another seven where it’s been decriminalized.) Meanwhile, New Frontier Data projects that if cannabis were to become legal in all 50 states today the nation would have as many as 1 million cannabis jobs by 2025.
An Exploding Job Market
With all this growth, hiring has become one of the greatest challenges in cannabis.
So you won’t see the 64,000 cannabis industry jobs that were created in 2018 listed by the Bureau of Labor Statistics. But they’re in the Leafly 2019 Cannabis Jobs Count, which found that the industry now employs more than 210,000 people and has grown by 110 percent in just three years.
University administrators looking into the future of the American workforce to see what programs they should be creating aren’t seeing a clear picture. The nation’s fastest growing industry is left out of the official statistics because federal law still makes it illegal.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -28.6% over the past 12 months, well below the Russell 1000’s total return of 25.2%. These market performance numbers and all statistics in the tables below are as of Jan. 6, 2022.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the past 12 months.
Fastest Growing Marijuana Stocks
These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves (or returns to) profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.
Below we look at the top five marijuana stocks with the best value, the fastest growth, and the most momentum.
The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal, and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.
GRWG, VRNO.CX, and IIPR are top for value, growth, and momentum, respectively
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