Whispers and rumors of widespread cannabis legalization are growing louder. Although the last major surge in top cannabis stocks during the late 2010s significantly eclipses today’s market and per-share pricing, top cannabis stocks are gradually ticking upward. Recent bullish developments are both multi-pronged and global, with places like Germany and Florida moving towards more extensive recreational legalization — not to mention apparently imminent Federal rescheduling.
But investors seeking cannabis stock gains are in a pickle. While some profitability issues may vanish with broader federal legalization (primarily due to complex tax considerations), cannabis remains a low-margin crop, with fierce competition and strict regulations further suppressing profits.
These companies have a headstart on the competition, though. Of the world’s top cannabis stocks by revenue, more than 20 American companies count themselves among the top earners. While not all of these companies are American, they’re all tradable — meaning regional diversification for investors building a well-rounded cannabis portfolio.
Tilray Brands (TLRY)
U.S.-based Tilray Brands (NASDAQ:TLRY) may have the lowest sales on this list of top cannabis stocks by revenue, but its robust sales pipeline —clocking in at $769.3 million last year—is nothing to sneeze at.
Tilray is champing at the bit to get a piece of wider medicalization of cannabis; CEO Irwin Simon told Barron’s that Tilray is “well-positioned and ready to participate in the medical cannabis market in the U.S.,” considering rescheduling the plant is a “significant milestone for drug policy reform in the U.S., as it paves the way for the establishment of a federally legal medical cannabis industry.” But Tilray isn’t resting on its laurels — the company is proactively diversifying revenue while simultaneously setting itself up to flood the zone as soon as wider legalization occurs.
Owning 5% of the national craft beer market gives Tilray a crucial lifeline while it waits for U.S. cannabis legalization. Likewise, the diversification boosts profitability in regions where cannabis is already legal, despite thin profit margins. Forecasting forward, Tilray’s acquisition of Anheuser-Busch’s (NYSE:BUD) craft beer division brought valuable marketing, distribution, and compliance expertise that will pay dividends for Tilray as market forces shift toward its favor.
Top Cannabis Stocks by Revenue: Cresco Labs (CRLBF)
Cresco Labs’ (OTCMKTS:CRLBF) revenue hit $842.7 million last year, making the Canadian company the world’s sixth-largest cannabis stock by revenue. The company is set to post first-quarter earnings on May 15th, and investors are particularly keen to hear about management’s developments toward “intelligent upgrades to [Cresco’s] Ohio infrastructure.”
The impetus for Cresco’s push in Ohio is the state’s recent adult-use program initiatives, which, according to one Ohioan cannabis lobbyist, are “moving very, very quickly to get a rule package in place and finalized.” This means that Ohio is serving as a testing and proving ground for Cresco to validate assumptions and fine-tune processes before wider adult-use authorization spreads.
Cresco is also proactively monitoring Florida’s emergent legalization plans, even as state governor Ron DeSantis comes out swinging against the ballot initiative. Cresco expects Ohio and Florida to represent “a combined $4 billion opportunity,” so management’s push to get ahead of the law is well-advised.
Verano (VRNOF)
Verano (OTCMKTS:VRNOF) barely edges out Cresco’s 2023 sales, marking $879.4 million in revenue for 2023. The company is on track to match or slightly exceed its 2023 sales stats, as management just reported 2024’s first-quarter results, which include $221 million in revenue and a respectable $21 million in free cash flow despite posting a $5 million net loss for the quarter.
Still, that’s a far cry better than December’s 2023 report which, despite a slightly higher sales figure, saw bottom-line net loss sit at a whopping $77 million. An improvement of that magnitude is astonishing and marks a strong start to what Verano CEO George Archos calls “one of the most transformative years for legal cannabis in our nation’s history.”
The company is projecting flat or slight sales growth for the remainder of the year but, if it can’t quite nail the landing, may find itself dislodged from its top spot in favor of one of many competitors lagging its revenue by a hair.
Top Cannabis Stocks by Revenue: Green Thumb Industries (GTBIF)
The first on our list of top cannabis stocks by revenue to break $1 billion, Green Thumb Industries (OTCMKTS:GTBIF) is also one of the few small-cap cannabis stocks to post consistent positive cash flow. For 2023, the company posted a 4% annual revenue growth while operational cash flow climbed 42% to $225 million. At the same time, net income hit $36 million for the year, or $0.15 per share. Profitability isn’t easy for cannabis stocks, and Green Thumb’s financial strength sets it apart to dominate the industry in 2024.
However, financial stability in this sector isn’t a matter of luck or rolling the dice. While many smaller cannabis firms prioritize product development over financial health—often succumbing to market dynamics they’re ill-prepared to handle—Green Thumb’s management remains acutely aware of economic trends and market expectations.
CEO Anthony Georgiadis explains, “Our obsessive focus on operational efficiency, working capital management, and cash flow generation has allowed us to continue to generate strong revenue and profitability performance, despite continued macro-economic and pricing headwinds in some of our markets.” That fundamental-first mindset is what could help Green Thumb propel well past $1 billion in sales for 2024.
Trulieve Cannabis (TCNNF)
The third-largest cannabis stock by revenue, Trulieve Cannabis (OTCMKTS:TCNNF), marked $1.2 billion in sales last year, but that’s just the beginning for the U.S.’s leading cannabis company. The company is already Florida’s largest cannabis dispensary, positioning it for easy market penetration if the state’s adult-use initiatives gain ground. It also remains diversified as the fourth-largest national dispensary network, with 127 locations and solid brand awareness.
Trulieve will release its first-quarter 2024 results on May 9, and investors are keen to see whether the company is successfully closing its profitability gap, which sat at a $527 million net loss in 2023. Remember, though, that losses are not unusual for a company in its growth phase within the challenging cannabis industry — cannabis stocks are speculative, and Trulieve is no exception.
Despite the losses, Trulieve outperformed analysts’ expectations last year and expanded its operations by 10%, adding 17 new dispensaries, including entries into the Connecticut, Maryland, Georgia, and Ohio markets.
Top Cannabis Stocks by Revenue: Curaleaf (CURLF)
At $1.3 billion in sales, Curaleaf (OTCMKTS:CURLF) is among pure-play top cannabis stocks ready to rise rapidly as rescheduling and legalization efforts accelerate. Curaleaf boasts 150 dispensaries across 18 states, a strong market presence that positions it to benefit greatly from any rescheduling and potential legalization moves. Despite its relative volatility (with a beta sitting at 1.60), Curaleaf maintains a solid financial foundation. Its revenue has remained steady despite challenging economic conditions, and the company’s cost-cutting efforts have achieved a 24% adjusted EBITDA margin.
Curaleaf is looking at the bigger picture, something rare for cannabis stocks finding themselves in a knife fight over regulatory nuance and shifting priorities. Management calls the legal cannabis industry a “generational wealth opportunity, expected to grow from $30 billion in 2023 to $46 billion by 2028.” Likewise, Wall Street analysts are optimistic, with 10 out of 13 recommending a Buy and 3 suggesting investors Hold, based on its significant market share and the potential boost from cannabis rescheduling. As Curaleaf continues to perform well, there remains substantial upside for investors looking into US cannabis stocks.
Jazz Pharmaceuticals (JAZZ)
The world’s top cannabis stock by revenue, Jazz Pharmaceuticals (NASDAQ:JAZZ), sold a whopping $3.7 billion in products for 2023. But Jazz is also unique among cannabis stocks because, like Tilray, it boasts diversified operations to offset cannabis sector volatility. Unlike Tilray, though, Jazz’s peripheral products range across the biotech and pharma industries, including cancer research. The company’s daytime sleepiness and narcolepsy medication, Xywav, is a stalwart performer that comprises as much as 10% of total sales.
Jazz is also uniquely positioned to capture emergent rescheduling trends, as the company’s subsidiary GW Pharmaceuticals “developed and commercialized the world’s first prescription medicine derived from the cannabis plant.” This means that Jazz is operating at the upper end of the medical cannabis value chain, unlike many pure-play cannabis stocks solely concerned with distribution. By retaining key infrastructure near the top, Jazz may dominate the burgeoning medical sector and surpass late entrants — even those well-established pharma companies that may enter the field post-rescheduling.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.