Best cannabis stocks

Worth over $13 billion USD, the global legal cannabis sector is expected to grow 25.5% annually until 2030, according to a 2021 Grand View Research report. Find out how to invest in cannabis stocks and cannabis ETFs in Canada, and check out a list of the best weed stocks.

Best weed stocks on the TSX

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What you should know before buying the best cannabis stocks

There’s no single winning strategy to finding what experts might call the best weed stocks on the TSX by performance, because the most important considerations are your own goals and circumstances. It’s not personal financial advice, and your personal objectives and financial situation have not been taken into consideration. Do your own research, and speak with an investment professional if in doubt.

Whether you care more about short-term capital gains or long-term dividend growth, it’s important to know whether a stock is performing well, making a profit, paying dividends or going backwards. Always remember that past performance does not guarantee future results. Investments can increase and decrease in value.

• How did we pick the best cannabis stocks on the TSX?

  We used Finder’s proprietary algorithm to rate the best weed stocks on the TSX based on price, performance, profit, revenue and dividends. Our fundamental analysis filters stocks by taking into account historical prices, dividends, revenue growth, (low) price volatility and profit margins. This might indicate a quality stock, but we do not guarantee the performance or returns of any investment.

  To avoid smaller, more speculative stocks, we only include companies with a market cap of more than CAD $200 million. In order to better compare historical data, we filtered out stocks that have been listed for less than 5 years. This methodology no doubt filters out some good stocks, so our decision to include or exclude a stock from our list does not indicate whether it’s a good or bad investment. For more information about our algorithm, check out our stock ranking page.

This list and data was compiled September 14, 2022. The algorithm was last updated 27 January 2021.

Buy the best cannabis stocks through an online broker

To invest in weed stocks, you’ll need a brokerage account. Compare online stock trading platforms below, and click Go to site to get started.

How do I buy cannabis stocks?

1. Choose a stock trading platform. If you’re a beginner, our table below can help you choose.
2. Open your account. You’ll need your ID, bank details and Social Insurance Number (SIN).
3. Confirm your payment details. You’ll generally need to fund your account with a bank transfer.
4. Find the stocks you want to buy. Search the platform and buy shares of the companies or ETFs you like. It’s that simple.

Invest in cannabis ETFs

Cannabis stocks aren’t the only way to buy into the industry. Exchange traded funds (ETFs) hold stocks in many companies. Sometimes, these funds hold stocks listed in a specific index with the goal of mimicking how that index performs.

Marijuana products

While smoking weed for recreational purposes is perhaps the most well-known use of cannabis, there are many types of businesses that can benefit from this growing industry. Cannabis can be used in a variety of ways including:

• Medicinal products. Medicinal cannabis is used for the treatment of cancer pain, epilepsy, palliative care, chemotherapy nausea, neuropathic pain, anorexia and neurological conditions. Cannabidiol, also known as CBD, is a derivative of the marijuana plant that’s become increasingly popular for medical uses.
• Science and research. Scientific study of marijuana has accelerated in recent years with the discovery of many other beneficial compounds besides the psychoactive THC.
• Recreational use. Marijuana as a recreational drug is legal in Canada but still restricted in some states and the US federal government. However, legalizing is starting to occur in parts of the US.
• Food products. Hemp is used as an ingredient in a range of products including cooking oils, snacks, protein powder, cooking flour and more. The sale of food products made from hemp seeds was authorized in the US by the 2018 Farm Bill.
• Building materials. Hemp is used in insulation and building construction materials and has several names such as hempcrete, hemp masonry and hemplime.
• Clothing. Hemp is broadly recognized as one of the most sustainable materials available in clothing manufacturing.
• Beauty products. Hemp is commonly used in health and beauty products like moisturizers, lip balms, makeup and skin oils.

Marijuana vs. hemp

Unlike marijuana, hemp does not have psychoactive properties. While hemp and marijuana come from the same cannabis plant, hemp contains only trace amounts of THC—the psychoactive component that gives the feeling of “getting high.” Typically, hemp is used in food products, building materials and textiles, while marijuana is used for medicinal and recreational purposes.

Bottom line

The legal cannabis industry is growing significantly, and there are a number of ways investors can get on board including weed stocks and ETFs. Keep in mind that past performance does not guarantee a profit. All investments come with risk.

Before buying cannabis stocks, carefully compare stock trading platforms to make sure you find the one that’s right for you.

Frequently asked questions

• Can I buy Supreme Cannabis Company Inc (FIRE) stock?

  No. Supreme Cannabis (FIRE) stock was delisted from the TSX after the company was bought by Canopy Growth Corporation (WEED) in 2021. You can buy WEED stock on the Toronto Stock Exchange.

• Can I buy WeedMD (WMD) stock?

  Yes, but not under the name WeedMD. In 2021, WeedMD rebranding to Entourage Health Corp. You can buy Entourage Health stock on the TSX Venture exchange under the ticker symbol "ENTG."

• Do any cannabis stocks pay dividends?

  Many cannabis companies do not pay dividends, although Innovative Industrial Properties (NYSE: IIPR) does. You can invest in cannabis-related businesses that pay stock dividends like Virginia-based tobacco company Altria Group (NYSE: MO), which bought a 45% stake in Cronos Group and advocates for cannabis legalization in the US. Another company that pays stock dividends is AbbVie (NYSE: ABBV), maker of the first FDA-approved cannabis drug, Marinol.