While many top cannabis stocks have existed for years, the U.S. market has warmed up to the cannabinoid sector only recently. About 40 states allow the use of cannabis, although not all permit its recreational administration.
The Biden administration is also changing federal legislation in favor of cannabis. In light of cannabis’ benefits, the administration is shifting it from the Schedule 1 class to a Schedule 3 substance. The cannabis market is looking likely to grow exponentially in the next couple of years.
The U.S. cannabis market is experiencing a CAGR of 24.03%, with the growing number of retail stores and dispensaries contributing significantly to that growth. These are the top three cannabis stocks to buy this year.
Jazz Pharmaceuticals (JAZZ)
Jazz Pharmaceuticals (NASDAQ:JAZZ) entered the cannabis sector in 2021 when it acquired GW Pharmaceuticals, and it has since established its presence in cannabinoid science. Through its intensive research and development projects, Jazz released Epidiolex, a cannabis-based drug for the treatment of childhood epilepsy, in 2022.
Epidiolex gained approval from the U.S. Food and Drug Administration (FDA) in the same year, making it the first cannabis-based drug to be accepted in the U.S. It was also a huge success commercially, raking in over $730 million in 2023 alone.
The past year has seen the Jazz share price drop significantly, falling from about $146 in February 2023 to $126. This dip coincides with a period of considerable R&D from Jazz Pharmaceuticals, as the company looks to roll out drugs to enhance cancer therapy, and the clinical trials for its Post-traumatic Stress Disorder (PTSD) medications are in phase 2.
With so much in store for Jazz Pharmaceuticals in 2024, Jazz shares could be one of the best cannabis stocks to buy right now. It’s a rare opportunity, especially now that the stocks are significantly undervalued.
GreenThumb (GTBIF)
GreenThumb Industries (OTCMKTS:GTBIF) has been one of the biggest cannabis companies in the U.S. since breaking into the retail business in 2014. Despite operating an over-the-counter (OTC) share sales policy, GreenThumb has managed to record profits year-on-year since 2020, expanding in the cannabis stock market as state and federal legislation lessened.
The company now records a market capitalization of over $3.2 billion, recording a whopping 13.9% growth in 2022 and gaining global prominence alongside. GreenThumb stocks remain one of the top performers in the cannabis market, recording a 15% drop during the bearish 2023 trading year when other cannabis companies dipped more than 30% at the time.
GreenThumb’s main attraction is its large presence in the U.S. market. The company boasts 18 manufacturing facilities in the country, with 90 retail outlets in 15 states. What’s more, GreenThumb is fast expanding, with new stores in Minnesota, Nevada, Pennsylvania and Virginia, and a product called Show Dogs, a cannabis-infused pre-roll.
With such potential for growth, the GreenThumb shares are one of the cannabis stocks that could turn out to be multibaggers this year. Its OTC trading status will also change soon, as the ongoing success in reducing federal legislation would see GreenThumb stocks listed on top U.S. stock exchanges. With such listings comes even more growth for GreenThumb and its investors.
Cronos (CRON)
Cronos (NASDAQ:CRON), like Jazz Pharmaceuticals, is a biotechnology company that seeks to provide cannabis-derived medicine for both recreational and health markets. Its shares are currently undervalued, as the Cronos group has recorded a 13.6% growth in the past six months. All things considered, the cannabis stocks from Cronos could be multibaggers this year.
One of Cronos’ strong points is its extensive cash buffering solution. The company has about $840 million in cash valuations and other liquidity, which is even more than its current market valuation. With that much in cash and assets comes increased potential for expansion and investments. One thing is certain — you can expect a lot from Cronos in the following months.
Cronos is also making global progress, securing partnerships in Europe and Australia as it seeks to expand its market operations. The new year saw the company deliver its first shipment of cannabis flowers to Vitura Health Limited in Australia. The deal entails Cronos using its technology and innovation to create tailor-made cannabis products for Vitura patients.
The deal with Vitura follows the launch of Cronos’ medical cannabis brand, PEACE NATURALS in Germany in Q3 2023. Cansativa Group in Germany partners with Cronos to distribute bulk cannabis shipments through its extensive pharmaceutical network in the country.
It’s been a busy few months for Cronos, and all that partnership is bound to yield massive profits soon. This could be your chance to get started on the best cannabis stocks in the market. Don’t miss out on it.
On the date of publication, Joel Lim 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.