With even the federal government considering de-scheduling marijuana, it seems many Americans are warming up to the budding industry. As predictions for marijuana revenues reach $60 billion this year, the potential for investor returns can’t be ignored. Moreover, several more states intend to put marijuana legalization on their ballots during the 2024 election.
If legalization increases and federal regulators loosen restrictions on cannabis companies, getting an early position could prove incredibly lucrative. Though marijuana production may not be the most technologically innovative sector, its legalization could create several stable growth stocks. That’s because cannabis stocks mimic the behavior of companies that specialize in consumable products, such as beverages and alcohol.
This means that the best cannabis stocks to buy are those prepared for rapid growth if given the green light. As such, here are three companies that collectively offer entry into a potentially emerging industry.
Tilray Brands (TLRY)
Also known for its ventures in the alcoholic beverage industry, Tilray Brands (NASDAQ:TLRY) offers investors an affordable entry into the world of cannabis stocks. The critical strength of Tilray is its extensive diversification in medical and recreational cannabis, alongside distilling and brewing brands.
This diversity allows investors an option to invest in a company that stands to profit significantly from marijuana legalization. It also helps minimize some of the risk should there be delays or political changes around the nature of marijuana. Examples of Tilray’s focused diversification include its acquisition of Colorado-based Breckenridge Distillery. By acquiring a respected distillery where recreational cannabis is legal, Tilray can focus on continuing to develop cannabis-infused drinks.
These strategic crossovers and products localized within the same jurisdiction provide stability and innovation for Tilray’s future expansion. Thanks to these innovative acquisitions, Tilray has earned a moderate buy rating among analysts.
Verano Holdings (VRNOF)
Vertically integrating nearly every aspect of its production, Verano Holdings (OTCMKTS:VRNOF) has created one of the most agile offerings in the cannabis industry. Focused on producing high-quality agricultural results. Verano has successfully expanded its operations across 13 U.S. states with 14 production facilities.
A widespread approach has forced Verano to consistently stay on top of the ever-changing nature of marijuana laws on the state and federal levels. It has also allowed the company to minimize costs and tailor production needs to the specific local trends of its areas. Honing in this business model also means Verano stands poised for further expansion into future states that legalize cannabis.
Verano also saw a healthy growth in sales in 2023, from $227 million in Q1 to $238 million in Q4. By outperforming the industry average and continuously focusing on efficient expansion, VRNOF stands among the best cannabis stocks to buy.
Green Thumb Industries (GTBIF)
Green Thumb Industries (OTCMKTS:GTBIF) has become one of the largest multi-state cannabis operators in the United States. Boasting over 80 retail locations across 15 states, the company has invested significant resources into uniform quality across its dispensaries. Additionally, it operates 18 production facilities and holds enough additional licenses to double its current distribution operations.
Unique among cannabis companies, GTBIF has consistently turned a profit since 2020. This has helped Green Thumb showcase a stable business model in an uncertain legal landscape. Through ongoing revenue expansion and financial health, the company seems ready for substantial long-term growth should laws continue to change in favor of cannabis.
Though exclusively traded on over-the-counter (OTC) markets in the U.S., GTBIF could be listed on major U.S. stock exchanges if federal restrictions on cannabis are lifted. Due to this stored potential for rapid growth, Green Thumb offers one of the best cannabis stocks to buy.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
