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Why Canopy Growth (CGC) Is Among the Best Cannabis Stocks To Invest In?
We recently compiled a list of the 11 Best Cannabis Stocks To Invest In. In this article, we are going to take a look at where Canopy Growth Corporation (NASDAQ:CGC) stands against the other best cannabis stocks to invest in.
The history of cannabis cultivation in America dates back to the early colonists, who grew hemp for textiles and rope. The plant was also widely used as a patent medicine during the 19th and early 20th centuries, described in the United States Pharmacopeia for the first time in 1850. Several political and racial factors led to the criminalization of cannabis in 1937 with the passage of the Marijuana Tax Act, but its legal status is now finally changing in many places.
The United States of America is the country that consumes the most weed in the world. As we mentioned in our article – 30 Cities with the Highest Weed Consumption in the US – the American legal cannabis industry fared well in 2023 as legal sales across the 38 states that allow some form of regulated marijuana reached $28.8 billion, a 10.3% increase from the previous year. Meanwhile, the legal cannabis industry also added 22,952 new jobs last year – a sign that the national business climate has somewhat stabilized following the turmoil of the previous two years. According to the 2024 Vangst Jobs Report, there were over 440,445 jobs supported by legal cannabis nationwide as of early 2024, an increase of 5.4% from 2023. The increasing legalization of cannabis and rising acceptance of its use for medical purposes are the key factors fueling the industry. Growth is also expected to come from new markets. One such example is Nebraska’s vote in favor of legalizing medical marijuana last month.
As of the writing of this article, 24 states have legalized recreational weed in America, in addition to the District of Columbia. However, possessing or selling marijuana remains a crime under federal law, punishable by prison time and fines.
In a significant setback for America’s legal cannabis industry, Florida voters rejected a ballot measure to legalize recreational marijuana in November. The measure, known as Amendment 3, got 55.9% support, failing to meet the required 60% threshold. This was despite historic levels of funding, a rigorous advertising campaign, and even an endorsement from President-elect Donald Trump.
Florida, with its population of 20 million people, is already home to the country’s largest medical marijuana market, boasting an annual revenue of $2 billion. The Sunshine State is also a popular tourist destination (especially during spring break) and attracts more than 140 million tourists every year. If Amendment 3 had been passed, Florida was expected to become a $6 billion cannabis market by 2026.
Through the Smart & Safe Campaign, Florida’s cannabis companies and individual donors collectively contributed more than $150 million to get legalization enacted into law, with most of it coming from the largest medical marijuana operator in the state. On the other hand, Florida Governor Ron DeSantis, who aggressively campaigned against Amendment 3, spent an estimated $50 million of taxpayer money on radio and television ads to successfully convince enough voters to reject the measure. Meanwhile, hedge fund billionaire Ken Griffin also came out against legalization and donated $12 million to the Vote No On 3 campaign.
This setback inevitably had an impact on cannabis stocks, which witnessed a downturn following the news of the rejection. Amplify Alternative Harvest ETF, the first US ETF to target the global cannabis industry, has fallen by almost 30% since November 4, closing at $2.33 on December 13, 2024.
Florida voters will now have to wait for two more years before cannabis legalization can get back on the ballot.
20 European Cities with Highest Weed Consumption
A close-up of a cannabis flower bud in its natural state with a shallow depth of field.
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 11 companies operating in the cannabis sector with the highest number of hedge fund investors. When two or more companies had the same number of hedge funds investing in them, we ranked them by the revenue of their last financial year instead. Following are the Best Cannabis Stocks According to Most Hedge Funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Number of Hedge Fund Holders: 9
An early mover in the Canadian market, Canopy Growth Corporation (NASDAQ:CGC) engages in the production, distribution, and sale of cannabis and cannabinoid-based products for both adult use and medical purposes.
Canopy Growth Corporation’s (NASDAQ:CGC) net revenue decreased 9% YoY in Q2 2025 ending September 30th 2024. However, if we exclude net revenue from businesses divested during the prior fiscal year, net revenue increased by 3%. Its Germany-based Storz & Bickel business, known for premium high-margin devices like the Volcano and Venti, delivered an overall net revenue growth of 32% YoY. The brand also witnessed strong growth in the US, led by increased orders from new distribution partners. Moreover, the company’s Canadian medical cannabis segment grew 16% YoY, while the Canada adult-use cannabis declined by 24%, in part due to an interruption in the supply of Wana edibles. It also seems to be doing well on the international front, as its sales grew by 72% YoY in the high-margin European markets. Canopy Growth’s asset-light model for Europe is also coming online now, supported by agreements with multiple EU-based cultivators, and is expected to provide the scalability that it needs to meet rising demand over the coming quarters without the need for heavy capital investments. The firm still incurred a net loss of $820,000 during Q2 2025, but it was approximately 37% less than the net loss it suffered in the same period last year.
The company is positioning itself to be a top Canadian entrant into the US market, as earlier this week, it announced the acquisition of Acreage, a multi-state operator of cannabis cultivation and retailing facilities in the country. This comes after it had already announced the acquisitions of Wana Wellness, The CIMA Group, and Mountain High Products in October.
David Klein, CEO of Canopy Growth Corporation (NASDAQ:CGC) stated:
“Completing the acquisition of Acreage marks the final step in establishing Canopy USA as a unified platform which we believe offers significant upside as the Canopy USA portfolio of brands can now capitalize on the rapidly expanding U.S. cannabis market, independent of the need for federal legalization. With a vertically integrated presence across key U.S. states in the Midwest and Northeast, as well as licensing agreements which support asset-light operations in state-legal markets nationally, Canopy USA is well positioned to demonstrate efficient growth ahead.”
Overall, CGC ranks 5th on our list of the best cannabis stocks to invest in. While we acknowledge the potential for CGC to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CGC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
