Four CBD-related companies worth investigating in the future year 2024.
Occasionally, the ideal moment to invest in a budding market might be following the initial excitement wanes. This could be applicable to investing in CBD stocks as well.
CBD stands for cannabidiol, which is a substance available in the cannabis plant. Unlike THC, CBD doesn't induce a high but has been discovered to have therapeutic properties.
The United States legalized hemp-derived CBD at the federal level with the 2018 Farm Bill. The prospect of this legislation's passage ignited investors' interest in the stocks of firms involved in the CBD industry.
Although federal legalization served as a significant milestone, the U.S. Food and Drug Administration (FDA) chose to leave CBD out of food supplements. As a consequence, the CBD market in the U.S. hasn't lived up to investors' expectations.
The CBD market could expand should the FDA change its stance. Until then, here are four CBD stocks to consider.
| Company | Market Cap | Overview || --- | --- | --- || Cresco Labs (OTC:CRLBF) | $448.2 million | An American multi-state cannabis operator that sells CBD products. || Green Thumb Industries (OTC:GTBIF) | $2.1 billion | An American multi-state cannabis operator that sells CBD products. || Jazz Pharmaceuticals (NASDAQ:JAZZ) | $7.7 billion | A pharmaceutical company with the first FDA-approved CBD drug. || Trulieve Cannabis (OTC:TCNNF) | $1.2 billion | A Florida-based American multi-state cannabis operator that sells CBD products. |
Cresco Labs
Cresco Labs (OTC:CRLBF)
Cresco Labs
$448.2 million
Cresco Labs is a cannabis operator based in Illinois that provides recreational and medical cannabis products in eight states. It holds the leading market share in three of those states: Illinois, Massachusetts, and Pennsylvania.
U.S. multi-state cannabis operator that markets CBD products.
The company is not simply a cannabis producer and retailer. Cresco also markets branded cannabis products containing CBD, such as its Wonder gummies.
Cresco has grown considerably in recent years, both through organic growth and acquisitions. It consistently generates strong free cash flow. The company is poised to benefit from tax changes related to the federal rescheduling of marijuana.
Green Thumb Industries (OTC:GTBIF)
Perhaps Cresco's biggest disadvantage is that the company cannot list its shares on a major U.S. stock exchange as long as marijuana remains illegal at the federal level. However, Cresco has still managed to attract investors through U.S. over-the-counter (OTC) markets.
$2.1 billion
Green Thumb Industries
U.S. multi-state cannabis operator that markets CBD products.
Green Thumb Industries
Like Cresco Labs, Green Thumb Industries is an Illinois-based American cannabis operator. It has retail stores in 14 states, including California, Florida, Ohio, Pennsylvania, and New York.
Jazz Pharmaceuticals (NASDAQ:JAZZ)
Green Thumb markets various brands in its Rise dispensaries. Its Rythm brand offers a line of CBD products.
$7.7 billion
The company is profitable, with revenue continuing to increase. It added new dispensaries in Florida and New York during the third quarter of 2024. Green Thumb has been able to pay off its $225 million senior secured debt that was scheduled to mature in 2025.
Pharmaceutical company with the first FDA-approved CBD drug.
More growth potential may be on the horizon. Green Thumb has operations in Minnesota, where a new recreational cannabis market is set to launch in 2025.
Jazz Pharmaceuticals
Trulieve Cannabis (OTC:TCNNF)
Jazz Pharmaceuticals
$1.2 billion
You may be surprised to discover a pharmaceutical stock on the list of top CBD stocks to consider. But Jazz Pharmaceuticals has a direct and crucial connection with CBD. In 2018, its Epidiolex became the first CBD product derived from the cannabis plant to win FDA approval for treating epileptic seizures.
U.S. multi-state cannabis operator that markets CBD products.
Jazz didn't own Epidiolex at that time. It acquired GW Pharmaceuticals, which developed the CBD medication, for $6.7 billion in 2021.
Epidiolex's sales aren't too far off from reaching the $1 billion mark or more, as some analysts predicted after being first approved in the U.S. Sales are still rising as the drug is now approved in more than 35 countries outside the U.S.
Jazz also has other growth drivers in its pipeline. Its sleep disorder drug Xywav is gaining traction, and its lung cancer drug Zepzelca is also seeing an increase in sales.
Trulieve encountered a hiccup when Florida electors thwarted a constitutional measure in November 2024, aiming to sanction recreational cannabis use. The proposed law needed a 60% affirmative vote, yet amassed only approximately 56%. Nevertheless, advocates remain determined to push for the decriminalization of recreational cannabis in the state. In the long run, Trulieve may seize an extensive expansion prospect in its native territory.
Keith Speights doesn't own any shares in the mentioned stocks. Our platform advocates Cresco Labs and Green Thumb Industries. Our platform follows a transparency policy.
After the passage of the 2018 Farm Bill, investors showed interest in CBD stocks due to the legalization of hemp-derived CBD at the federal level. Given the potential expansion of the CBD market if the FDA changes its stance, Cresco Labs, with its strong free cash flow and market share in several states, could be an attractive investment opportunity for finance-minded individuals looking to invest in CBD stocks.
Despite potential setbacks, such as the failure to sanction recreational cannabis use in Florida, some CBD stocks like Trulieve Cannabis still have growth potential. Investors interested in the finance aspect of investing might consider these stocks given their long-term expansion prospects in their respective markets.
