Marijuana stocks for buy-and-hold investors.
Investors have been reading plenty about cannabis stocks in the past couple of years, but some of the biggest companies in the cannabis space may not yet be household names. Marijuana is still illegal on a federal level in the U.S., and American investors looking to dip their toes into marijuana investing may not know where to start. With the large degree of uncertainty ahead in the cannabis industry, investors should think long term with these seven stocks and diversify their marijuana investments.
Next:Canopy Growth Corp. (ticker: CGC) Credit
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Canopy Growth Corp. (ticker: CGC)
Canopy is a Canadian cannabis producer with a market cap of around $12.3 billion. As of 2018, Canada accounted for about 90% of Canopy’s sales, but the company is well-positioned to expand to markets around the world as the industry grows. Morningstar analyst Kristoffer Inton recently named Canopy one of his top cannabis stock picks. Inton says Canopy’s conditional buyout of Acreage Holdings (ACRGF) grants Canopy a potential first-mover advantage the massive U.S. market. Morningstar has a “buy” rating and $54 fair value estimate for CGC stock.
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Marijuana stocks for buy-and-hold investors.
Investors have been reading plenty about cannabis stocks in the past couple of years, but some of the biggest companies in the cannabis space may not yet be household names. Marijuana is still illegal on a federal level in the U.S., and American investors looking to dip their toes into marijuana investing may not know where to start. With the large degree of uncertainty ahead in the cannabis industry, investors should think long term with these seven stocks and diversify their marijuana investments.
Canopy Growth Corp. (ticker: CGC)
Canopy is a Canadian cannabis producer with a market cap of around $12.3 billion. As of 2018, Canada accounted for about 90% of Canopy’s sales, but the company is well-positioned to expand to markets around the world as the industry grows. Morningstar analyst Kristoffer Inton recently named Canopy one of his top cannabis stock picks. Inton says Canopy’s conditional buyout of Acreage Holdings (ACRGF) grants Canopy a potential first-mover advantage the massive U.S. market. Morningstar has a “buy” rating and $54 fair value estimate for CGC stock.
Tilray (TLRY)
Canadian cannabis producer Tilray primarily operates within the Candian market, but it also sells cannabidiol in the U.S. market. Tilray pivoted from medicinal marijuana supply to recreational cannabis production in 2018 when Canada legalized adult-use marijuana. Medicinal marijuana now accounts for only about a third of production, down from 90%. Inton says Tilray’s deal with alcohol giant Anheuser Busch Inbev (BUD) and its partnership with Authentic Brands Group give the company exposure to the potential high-growth U.S. and cannabis beverage markets. Morningstar has a “hold” rating and $40 fair value estimate for TLRY stock.
GW Pharmaceuticals (GWPH)
GW Pharmaceuticals was one of the first pure-play cannabis stocks listed on the U.S. market. In June 2018, GW’s leading epileptic seizure drug Epidiolex made history by becoming the first drug ever derived from marijuana to be approved by the U.S. Food and Drug Administration. GW Pharma has reported positive Phase III data in treating tuberous sclerosis complex as well. Bank of America analyst Tazeen Ahmad says Epidiolex sales in the first quarter of 2019 were more than double her forecast. Bank of America has a “buy” rating and $218 price target for GWPH stock.

Aurora Cannabis (ACB)
Aurora is the second largest Canadian cannabis producer by cultivation capacity and the company has a $7.2 billion market cap. Aurora has no exposure to the U.S. market, but it is expanding its business into countries such as Denmark, Portugal and Uruguay. In addition to deals with three leading Canadian pharmacy chains, Inton says Aurora’s focus on efficient cultivation will help it achieve lower production costs than peers. A potential large U.S. or global partnership could be a positive catalyst. Morningstar has a “buy” rating and $10 fair value estimate for ACB stock.
Hexo Corp. (HEXO)
Hexo is a Canadian cannabis supplier that is the preferred supplier of the province of Quebec. Bank of America analyst Christopher Carey says Hexo is his top overall cannabis stock pick thanks to the company’s valuation, relatively low risk and innovative business. Hexo already has a beverage partnership with Molson Coors Brewing (TAP), but Carey says there is plenty of opportunity for additional deals and partnerships down the road. Carey says Hexo has attractive margins, even if wholesale cannabis prices weaken. Bank of America has a “buy” rating and $8 price target for HEXO stock.
Cronos Group (CRON)
Cronos is a Canadian cannabis supplier based in Ontario. Last year, tobacco giant Altria (MO) invested 2.4 billion Canadian dollars ($1.83 billion) in Cronos. Inton says Altria provides much-needed capital and global marketing experience, as well as expertise in branding and navigating government regulations. In fact, Inton says Altria could eventually acquire Cronos completely if its partnership is successful. Morningstar is forecasting 31% compound annual growth in volumes over the next 10 years and 2028 operating margin of around 25%. Morningstar has a “hold” rating and $11 fair value estimate for CRON stock.
Curaleaf Holdings (CURLF)
Unlike the Canadian producers, Curaleaf is headquartered in Massachusetts and is the largest U.S. multi-state operator. Curaleaf owns and operates 44 U.S. marijuana dispensaries, 12 cultivation sites and 11 processing facilities in 12 different U.S. states. Inton says Curaleaf’s U.S. presence puts the company at a disadvantage in international markets, but that dynamic would shift should the U.S. legalize marijuana. In addition to Canopy, Inton says Curaleaf is a top cannabis stock pick based on its current valuation. Morningstar has a “buy” rating and $10.50 fair value estimate for CURLF stock.
Top marijuana stocks for buy-and-hold investors:
Canopy Growth Corp. (CGC)Tilray (TLRY)GW Pharmaceuticals (GWPH)Aurora Cannabis (ACB)Hexo Corp. (HEXO)Cronos Group (CRON)Curaleaf Holdings (CURLF)1 of 10
Wayne Duggan, Contributor
Wayne Duggan has been a U.S. News & World Report contributor since 2016. He is an expert at ... Read more
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