Best Marijuana Stocks to Buy: Cannabis Stocks for Investing

The best marijuana stocks have been put through the wringer for years. But with U.S. cannabis sales on the rise, these picks could finally have their day in the sun.

A marijuana plant growing in the sun.
(Image credit: Getty Images)

Marijuana stocks have given cannabis investors nothing but false starts over the past few years. Most recently, there have been a plethora of issues facing the industry, including inflation, overproduction, lack of capital, job losses and cratering stock prices.

But investors that hold the industry's best stocks to buy and the top exchange-traded funds (ETFs) — and perhaps a bit more patience — should be best-positioned for marijuana's eventual renaissance.

Amazingly, while marijuana stocks haven't delivered the long-term returns investors have yearned for in recent years, the cannabis industry in the U.S. is relatively healthy. That's despite a continued delay in federal legalization and ongoing stalling by lawmakers on the SAFER Banking Act, legislation that aims to improve cannabis companies' access to finance.

You can thank a growing number of forward-thinking states, such as Ohio, which legalized recreational marijuana use in November.

Estimates from Whitney Economics, a cannabis and hemp consulting firm, suggest legal cannabis sales (adult-use and medical) could reach $31.4 billion this year, up 9.1% over 2023. 

"Cannabis legal sales have been suppressed since the end of the pandemic, partly due to changes in consumer purchasing behavior, macro issues such as higher interest rates, declining cannabis business conditions and slower than normal regulatory implementations in new markets," the firm said in a press release. "Despite these headwinds, growth rates have remained positive in the U.S. overall."

Additionally, in late April, news the Drug Enforcement Administration (DEA) will recommend reclassifying marijuana as a Schedule III drug vs its current Schedule I status gave cannabis stocks a big boost. The process is in the early stages, but once complete, it will clear a major regulatory hurdle for cannabis companies. 

Ultimately, the following picks look like the best marijuana stocks (and fund) to benefit from this ongoing growth and maturation.

Disclaimer

Data is as of April 29. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. 

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.

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