Why invest in cannabis stocks?
Post legalization, the cannabis industry in Canada, and marijuana stocks in general, experienced an up-and-down history. At the time, projections put the domestic Canadian cannabis market to reach $9.2 billion CAD by 2025.1
And now it's 2025. In 2024, the Canadian cannabis market reached an estimated $12.6 billion CAD, reflecting a compound annual growth rate (CAGR) of 29.4% over the past five years.2
Projections indicate continued expansion, with the market expected to grow at a CAGR of 16.8% from 2024 to 2030.3
Despite a steady decline in these stocks' values, it might be the time to "buy the dip" with bullish blogger sentiment, potential legalization in the U.S. and more innovations on the way.
Top cannabis stocks in Canada
Since the country's legalization of marijuana in 2018, several companies have emerged as industry leaders, demonstrating significant growth and potential. Here's a snapshot of the top cannabis stocks listed on the Toronto Stock Exchange (TSX) you might consider.
| Canadian pot companies | Description |
|---|---|
| Canopy Growth Corporation (TSX: WEED) | As one of the pioneers in the Canadian cannabis industry, Canopy Growth has established a strong market presence. Despite facing challenges in recent years, the company reported a 20.3% increase in Canadian medical cannabis revenue, reaching C$18.8 million in the quarter ended June 30, 2024.4 |
| Aurora Cannabis Inc. (TSX: ACB) | Aurora Cannabis has made significant strides in the medical cannabis sector. In the fiscal third quarter of 2025, the company reported revenue of $88.2 million, marking a 37% increase from the previous year. 5 |
| OrganiGram Holdings Inc. (TSX: OGI) | OrganiGram has been expanding its footprint, aiming to become Canada's largest cannabis company by market share. The company recently agreed to acquire Motif Labs Ltd. for up to C$100 million, a move expected to enhance its market position.6 |
Over the past five years, leading Canadian cannabis companies like Canopy Growth, Aurora Cannabis, and OrganiGram have seen their stock prices decline between 86% and 99%. This significant downturn raises questions about their potential for a rebound and the rationale behind considering them for investment.
Buy the dip, they say.
Here are some indicators these companies might be poised for recovery.
- Aurora Cannabis: In fiscal Q1 2025, Aurora reported revenue of $83.4 million, with analysts projecting sales to rise to $335 million for the full fiscal year. Additionally, adjusted earnings are expected to expand to $0.6 per share.
- OrganiGram: The company achieved a 17% increase in net revenue, reaching $42.7 million in Q1 Fiscal 2025 compared to the same period the previous year. They also secured 124.6 million from British American Tobacco in November 2023 for international expansion and product innovation to enter new markets.
- Canopy Growth: In Q3 FY2025, Canopy reported net revenue of $74.8 million, with a 61% improvement in adjusted EBITDA loss year-over-year.
While these seem like a can't miss opportunity, you have to understand the inherent risks and volatility of the cannabis industry. Understand your risk tolerance and do your research.
Invest in marijuana with some of Canada's top brokerages
| Questrade | CIBC Investor's Edge | TD Direct investing |
|---|---|---|
|
|
|
|
🥬 Supports both Canadian and U.S. dollar accounts, facilitating investments in cannabis stocks across North American markets
🥬 Offers competitive commission rates, making frequent trading more cost-effective 🥬 Provides advanced trading tools and platforms for informed decision-making |
🥬 Online trades for stocks and ETFs are priced at $6.95 per trade, with discounts for active traders and students
🥬 Access in-depth analysis and insights to make informed investment decisions 🥬 The intuitive online and mobile interfaces simplify the trading process |
🥬 Access to a wide range of Canadian and U.S. cannabis stocks
🥬 Integration with TD banking services for seamless fund transfers 🥬 Comprehensive research tools and resources to aid investment decisions |
| Questrade review | CIBC Investor's Edge review | TD Direct Investing review |
| Visit Questrade | Visit CIBC Investor's Edge | Visit TD Direct Investing |
U.S. cannabis stocks available to Canadian investors
Many U.S. cannabis operators list their stocks on Canadian exchanges (e.g. TX) due to the federal illegality of marijuana in the United States. The law prohibits them from listing on major U.S. exchanges like the NYSE or Nasdaq.
By listing in Canada, these companies can raise capital and offer investment opportunities to the public.
| American pot stocks on the TSX | Description |
|---|---|
| Curaleaf Holdings, Inc. (TSX: CURA) | Curaleaf is a leading U.S. cannabis operator with a broad footprint across multiple states. In 2024, the company reported revenues of $1.3 billion, reflecting its expansive operations and market reach. Curaleaf has also ventured into the hemp-based THC beverage market, launching products to diversify its offerings amid evolving regulations. |
| Green Thumb Industries Inc. (CSE: GTII.CN) | Green Thumb has established itself as a prominent player in the U.S. cannabis industry. In 2024, the company reported revenues of $1.1 billion and a net income of $73 million, indicating robust financial health. Green Thumb continues to expand its retail presence, operating over 100 dispensaries nationwide. |
| Trulieve Cannabis Corp. (CSE: TRUL) | Trulieve is recognized for its strong presence, particularly in Florida. In 2024, the company reported revenues of $1.2 billion, with a significant portion derived from its extensive retail operations. Trulieve has also entered the hemp-based THC beverage market, launching products to capitalize on new consumer trends. |
Note: Canadian Securities Exchange (CSE): Many U.S. cannabis companies are listed on the CSE, allowing direct investment through your brokerage. You might also see availability in over-the-counter (OTC) markets accessible through your Canadian brokerage accounts such as Wealthsimple or Questrade.
The cannabis industry has faced significant challenges recently, with many stocks experiencing sharp declines. For instance, Curaleaf Holdings' stock has fallen about 62% this year.7 Despite these setbacks, some analysts and investors see potential opportunities, viewing the current downturn as a chance to "buy the dip."
- Curaleaf has been expanding its product line to include hemp-derived THC products, aiming to tap into new revenue streams amid stagnant federal legalization efforts.8 While the stock has faced recent declines, this strategic diversification could position the company well for future growth.
- Green Thumb has also ventured into the hemp-based THC market, launching new products to adapt to the evolving regulatory landscape.9 Analyst ratings reflect a cautiously optimistic outlook, with a consensus rating of "Moderate Buy" and an average 12-month price target of $18.12, suggesting potential upside.
- Trulieve is actively participating in industry efforts to push for federal reforms, collaborating with other major players to advocate for legislative changes.10 Analysts have given Trulieve a "Moderate Buy" rating, with an average price target of $13.38, indicating potential growth prospects.
While these companies have experienced significant stock price declines, their strategic initiatives and the potential for regulatory reforms contribute to a cautiously optimistic outlook among some analysts and investors.
US pot companies, Trump and legalization
As of February 2025, 24 states have legalized recreational cannabis, reflecting a growing acceptance across the nation.
During his 2024 campaign, Trump expressed support for reclassifying cannabis to a Schedule III substance, potentially easing federal restrictions and reducing tax burdens for cannabis businesses.
Despite these developments, federal legalization has not been achieved. The Drug Enforcement Administration (DEA) is currently undergoing a formal rulemaking process to potentially reschedule cannabis, with proceedings expected to continue through March 2025.11
Lower your risk: Invest in cannabis ETFs
Investing in exchange-traded funds (ETFs) offers a strategic avenue for risk-averse investors looking to enter the cannabis sector.
ETFs provide diversification by pooling a variety of stocks, which can mitigate the volatility associated with individual securities. This approach allows investors to gain exposure to the cannabis industry's potential growth without the need to select individual companies.
| Top cannabis ETFs | Description |
|---|---|
| Horizons Marijuana Life Sciences Index ETF (HMMJ) | Launched in 2017, HMMJ was the world’s first cannabis-focused ETF. It seeks to replicate the performance of the North American Marijuana Index, offering exposure to a diversified basket of North American publicly listed companies involved in the marijuana industry. As of February 26, 2025, HMMJ has net assets of approximately $58.14 million CAD and an annualized distribution yield of 3.90% |
| AdvisorShares Pure US Cannabis ETF (MSOS) | Introduced in 2020, MSOS is the first actively managed U.S.-listed ETF focusing exclusively on U.S. cannabis companies, including multi-state operators. This ETF provides investors with exposure to the largest cannabis market globally, which is projected to experience significant growth. As of February 27, 2025, MSOS trades on the NYSE Arca exchange with a net asset value (NAV) of $3.19 USD. |
Pros
-
Diversification: ETFs spread investments across multiple companies, reducing the impact if one company underperforms.
-
Professional management: Actively managed ETFs like MSOS benefit from experienced portfolio managers who navigate the complex cannabis market.
-
Accessibility: ETFs offer a straightforward way to invest in the cannabis sector without the need to research and select individual stocks.
Cons
-
Market volatility: The cannabis industry is still figuring out all the innovations possible. As high as we saw it climb from the have-a-good-time drug, we've seen its collapse and now we might see its resurgence.
-
Regulatory risks: Changes in legislation can impact the performance of cannabis-related investments.
Alternative ways to invest in cannabis
Investing in companies indirectly connected to the cannabis industry can offer exposure to this burgeoning market with potentially reduced risk.
By focusing on businesses that support or partner with cannabis producers, you can participate in the sector's growth without the volatility associated with pure-play cannabis stocks.
| Other types of cannabis investments | Description |
|---|---|
| Partnered company example: Constellation Brands' stock (NYSE: STZ) | A leading beverage alcohol company, has made significant investments in Canopy Growth Corporation, a prominent cannabis producer. In April 2024, Constellation converted its common shares in Canopy into non-voting exchangeable shares, a move designed to support Canopy's strategy while eliminating the impact on Constellation's equity earnings.12 |
| Cannabis supplier example: Scotts Miracle-Gro's stock (NYSE: SMG) | cotts Miracle-Gro, known for its lawn and garden products, has a subsidiary called Hawthorne Gardening Company that specializes in hydroponic and indoor growing supplies. In January 2025, Scotts announced plans to spin off Hawthorne into a standalone entity, aiming to stabilize its stock valuation and reduce volatility associated with the cannabis sector.13 |
| Private equity/venture capital example: Entourage Effect Capital | Founded in 2014, Entourage Effect Capital is a venture capital firm dedicated to the cannabis sector. They focus on providing capital and strategic support to companies across various industry segments, including cultivation, distribution, and ancillary services. Their portfolio includes over 60 companies, such as Cookies, GrowFlow, and Cann.14 |
Is now the best time to invest in cannabis stocks?
Cannabis stocks and ETFs are sitting at all-time lows, but that may not last forever.
If you believe in the long-term potential of this industry — whether through medical advancements, federal legalization in the U.S., or expanding global markets — now could be the perfect time to invest. The cannabis sector isn’t just about recreational use; it’s also pushing boundaries in healthcare, with research exploring cannabis-based treatments for arthritis, chronic pain, epilepsy, and even neurodegenerative diseases like Alzheimer's and dementia. If these innovations gain traction, today’s struggling companies could be tomorrow’s biotech giants.
The risk is high, but so is the potential for massive returns. Buying in at historic lows gives you a front-row seat to any resurgence — whether driven by legislative breakthroughs, medical discoveries, or shifting public sentiment.
But, as always, do your research, diversify, and invest only what you can afford to hold through volatility. If cannabis stocks do take off again, you’ll be glad you got in while the price was right.
FAQ
Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star.
Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.
Best investing content
How to...
Platform reviews
Latest Articles
Disclaimer
The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.
†Terms and Conditions apply.