Before diving deeper into cannabis stocks and funds you can invest in, let’s look at some key reasons to invest in the cannabis industry in general.

This way, you can consider the risks and benefits of investing in cannabis stocks and decide whether it is the right financial move for you.

Some reasons to consider investing in the cannabis industry include:

• Growth potential - The cannabis industry is relatively young and is expected to experience significant growth as legalization efforts continue in various regions around the world. As more countries and states legalize either medical or recreational cannabis, the market size is likely to expand
• Diversification - Investing in the cannabis sector can provide diversification to your investment portfolio. It's an industry that operates somewhat independently of traditional markets, so it can offer a way to spread risk and potentially achieve higher returns
• Versatility - Cannabis has many applications, including being used in textiles, medication, recreation, and more. This amplifies the growth potential of cannabis companies 
• Regulatory improvements - Attitudes toward cannabis are changing, with a growing acceptance of its medical and even recreational use. This shift in public opinion may lead to more lenient regulations and an increased demand for cannabis-related products
• Export opportunities - In countries where cannabis is legal, there may be opportunities for companies to export their products to other markets where it's also legal. This could lead to increased revenue streams and expansion potential

A majority of cannabis stocks are based in Canada, where marijuana is fully legal and the cannabis industry has been developing since the country fully legalized it in 2018. 

2022 and 2023 have been very difficult years for the cannabis industry. With rising interest rates and a dovish investment climate, investors have been shying away from speculative investments for the past 2 years, while banks and major financial institutions have been notoriously tight-fisted when it comes to financing cannabis companies. 

Mass sell-offs have made cannabis stocks very affordable investments and investors across the board can easily buy up these stocks at very low valuations. 

The best cannabis stocks are characterized by a decent cash position to fund their long-term growth, as well as solid growth prospects in the long run. 

Tilray Brands Inc (NASDAQ:TLRY)

• Tilray is involved in the cultivation of cannabis plants for both medical and recreational use. The company operates facilities where they grow cannabis under controlled conditions to ensure quality and consistency
• One of the largest players in the cannabis market, Canadian Tilray Brands has been expanding aggressively in the United States market
• In the case of full legalization in the United States, Tilray has an advantage over competitors, with a bulk of its infrastructure already built out 
• TLRY stock has returned -29% over the past 12 months and stands at a $1.75 billion market capitalization
• The company is reducing its losses quarter after quarter, with an average quarterly revenue within the $150-$200 range 
• Tilray’s annual revenue growth reached 22.5% in FY2022

Curaleaf Holdings Inc (CNSX:CURA)

• Curaleaf is one of the largest cannabis producers in the world. Headquartered in Canada, the company is well-positioned to take advantage of the opportunities in the United States market
• Curaleaf has a market capitalization of CAD 2.47 billion and has lost almost 49% of its stock value over the past year 
• Still operating at a loss, Curaleaf has managed to grow quarterly revenues to $338 million as of Q2 2023
• Curaleaf’s annual revenue growth amounted to 10.5% in 2022

Verano Holdings Corporation (CNSX:VRNO)

• Verano Holdings Corporation is well-positioned to expand rapidly in the United States, with an annual revenue growth of 19.2% in 2022
• The company’s quarterly revenues average between $200-250 million for FY2023
• Despite being a United States company, the company is listed on the Canadian Securities Exchange 
• The stock has lost roughly 52% of its market value over the past 12 months 
• The company went public in 2021 and has been on the backslide ever since, dropping to a market capitalization of CAD 1.25 billion, making VRNO one of the most affordable cannabis stocks on the market 

Green Thumb Industries Inc (CNSX:GTII)

• Green Thumb Industries is a U.S. cannabis packaged goods company with over 15 manufacturing and 70 retail locations across the United States 
• Green Thumb Industries has a market capitalization of CAD 1.95 billion and quarterly revenues of $250 million 
• The company had an annual revenue growth of 13.9% in 2022 
• Green Thumb is also listed on the Canadian Securities Exchange 
• The stock has lost 35% of its market value over the past 12 months of trading 
• The stock has a price/sales ratio of 1.7 

Cresco Labs Inc (CNSX:CL)

• Cresco Labs is the largest cannabis product wholesaler in the United States, where it operates over 60 stores
• The company has been expanding rapidly, however, revenue growth has been slow in 2022, increasing by a negligible 2.6%
• The company has a market capitalization of CAD 475 million and quarterly revenue of CD 190 million 
• Cresco Labs is traded in the United States as a Canadian ADR
• If the company manages to accelerate its revenue growth, Cresco Labs is well-positioned to expand considerably in the United States 
• Cresco Labs has a price/sales ratio of 0.6 

SNDL Inc (NASDAQ:SNDL)

• SNDL is a Canadian cannabis product company that is listed on the Nasdaq and has a market capitalization of $440 million 
• The company has quarterly revenues of $245 million and has managed to limit its losses in 2023 
• SNDL has lost over 38% of its stock value over the past year 
• Sundial operates cannabis cultivation facilities where they grow cannabis plants under controlled conditions
• SNDL has lost roughly 99% of its market value since going public in 2019 but could be poised for explosive growth once cannabis if fully legalized in the United States 

Trulieve Cannabis (CNSX:TRUL)

• Trulieve Cannabis is another Canadian cannabis company that has not fared well in 2022 and 2023 - losing over 68% over the past 12 months 
• Trulieve’s quarterly revenues amount to $280 million, with losses widening in 2023 
• The company enjoyed annual revenue growth of 32.1% in 2022 
• Trulieve’s market capitalization has fallen to CAD 942 million
• The company has a price/sales ratio of 0.7 
• Trulieve Cannabis is another Canadian company that trades on the OTC market in the United States 

TerrAscend Corporation (TSE;TSND)

• TerrAscend Corporation is a U.S-based cannabis company that is listed on the Canadian Securities Exchange and could be listed on the Toronto Stock Exchange in the future 
• The company has a market capitalization of CAD 665 million and a price/sales ratio of 1.4 
• TerrAscends annual revenues have increased by 17.8% in 2022 
• The stock has lost 5.3% of its market value over the past 12 months, making it one of the best-performing cannabis stocks this year 

Cannabis ETFs are diversified funds that invest in a variety of different public cannabis companies. This allows investors more freedom and removes the hassle of picking individual stocks. 

Since the cannabis market has endured a rough period in 2022 and 2023, most cannabis ETFs have also lost a lot of value over the past 12 months. However, cannabis ETFs offer diversification and variety to their shareholders. 

Cambria Cannabis ETF (TOKE)

• The Cambria Cannabis ETF was launched on July 25, 2019, and is an actively managed ETF
• The fund has an expense ratio of 0.42% and an annual dividend yield of 4.03%
• TOKE’s largest holdings include - STZ (10.60%), IMB (8.42%), JAZZ (8.04%), PM (6.76%), and MO (6.56%)
• The fund has an ESG rating of 5.3/10 
• TOKE has lost roughly 26% of its market value over the past 12 months of trading 
• Cambria Cannabis invests in a number of cannabis and tobacco companies while holding a considerable cash position (6.77%)

Global X Cannabis ETF (POTX)

• The Global X Cannabis ETF was launched on September 17, 2019, and tracks the Cannabis Index 
• The fund has an expense ratio of 0.51% and an annual dividend yield of 4.18%
• POTX’s largest holdings include - SNDL (19.15%), IIPR (15.91%), OGI (4.76%), WEED (4.56%), and CRON (4.45%). The fund has also invested in a wide variety of other cannabis equities, which account for 17.79% of the fund’s holdings
• POTX does not have an active ESG score
• The fund has lost roughly 60% of its market value over the past year of trading 

Amplify Seymour Cannabis ETF (CNBS)

• The Amplify Seymour Cannabis ETF was launched on July 23, 2019, and is an actively managed ETF
• The fund has an expense ratio of 0.75% and does not pay dividends to shareholders
• The largest holdings of CNBS include a number of different equity investments (11.78%), as well as large holdings of cash (20.90%) and a holding of the Short Term Investments Trust Government & Agency Portfolio Institutional (20.20%) 
• CNBS does not have an active ESG score
• The fund has lost roughly 45% of its market value over the last year of trading 

• The cannabis market is touted as a rapidly growing market, set to reach over $445 billion by 2030
• The full legalization of cannabis in the United States has stalled, which has caused the cannabis market to enter a major bear market, with most stocks and ETFs shedding over half of their market value 
• Most cannabis companies are based in Canada, which legalized cannabis in 2018
• Companies, such as Tilray Brands, SNDL, and Green Thumb Industries have a lot of room for growth, as well as a solid standing in the U.S. states where cannabis has been legalized
• Further legalization efforts in the United States and the rest of the world could greatly accelerate the growth of the global cannabis market