Cannabis stocks: Well-known companies, USA, Canada, ETFs - 4 opinions on investment and risk

Cannabis stocks have been the subject of debate for years – sometimes celebrated as the industry of the future, sometimes criticized as overheated hype. At the latest with the partial legalization in Germany, the topic has come back into focus. But what does the market really look like? Which companies are active, how does cultivation on plantations, supply chains and markets work – and where are the structural opportunities and risks? How can we give you a good overview? We start with well-known cannabis companies and shares and then take a differentiated look at cannabis as an investment based on 4 expert opinions.

Cannabis stocks: Well-known companies as a first overview
Ever since Donald Trump’s announcement to declassify cannabis (from hard to soft drug, more precisely: the classification from “Schedule I” to “Schedule III”), the market has been in a tizzy. Share prices are rising and the first dreams of a Weed Nation under Trump, who would have thought?

The same companies are often named as the entry point. According to finanzen.net, these include Canadian producers in particular, as Canada established a regulated market early on.

“Let’s differentiate between 3 categories: 1) domestic focus, 2) international focus and 3) investments from tobacco and consumer goods companies.”

Foreword: Information we provide is for general educational and informational purposes only and should never be used as a basis for making specific investment decisions. It is always advisable to seek advice from a qualified financial advisor before investing.

US companies with a strong domestic focus

Some of the most important cannabis companies are almost exclusively focused on the US market. These so-called multi-state operators (MSOs) cultivate, process and distribute in several states, but have so far only had a limited presence on major stock exchanges.

Curaleaf Holdings
Green Thumb Industries
Trulieve Cannabis
Cresco Labs

Canadian producers with an international focus

In addition to the home market of Canada, several companies are focusing on international expansion at an early stage. The focus is primarily on medical use in Europe, Latin America and Australia.

Canopy Growth
Tilray Brands
Aurora Cannabis
Organigram

Investments from tobacco and consumer goods groups

Large corporations from the tobacco and consumer goods industry have been selectively involved in the cannabis sector for years. These are mostly minority shareholdings or strategic options.

Altria Group
Philip Morris International
British American Tobacco

Companies in focus: Canopy, Tilray & Co.
International markets enable broad-based growth. Countries of origin such as Canada have thus become major players.

Canopy Growth

Canopy Growth is described by finanzen.net as one of the best-known players. The company produces medical cannabis and industrial hemp. At the same time, the sharp fall in the share price since the boom in 2021 shows how high expectations originally were and how strongly they were corrected.

Tilray Brands

Tilray is one of the largest cannabis companies in the world. finanzen.net particularly emphasizes the cooperation with the pharmaceutical company Sandoz, which is intended to facilitate access to the European market.

Aurora Cannabis

More about Aurora Cannabis.

Organigram

More about Organigram.

Market psychology and hype cycles

Häufig von anderen gelesen

Jens Rabe clearly classifies cannabis stocks as highly speculative. He refers to previous boom phases in which many stocks fell by 80-90 percent – and then never returned to their previous highs.

A key issue here is the so-called anchor effect: investors are guided by previous highs and assume that these must be reached again. According to Jens Rabe, this is statistically rarely the case.

Previous highs as a false reference
Strong emotional market movements
Comparable to previous commodity and tech hypes

Institutional investors and market size

According to Jens Rabe, a look at cannabis ETFs shows that institutional capital is largely absent. Even large cannabis ETFs in the USA only manage small amounts in the billions – a very small figure compared to other thematic markets.

One reason is that many institutional investors are not allowed to buy shares below certain price levels or with a low market capitalization. Many cannabis stocks fall into precisely this category.

Low fund volumes
Hardly any institutional participation
High dependence on private investors

Cultivation, plantations and overcapacity

Philip Hopf emphasizes that many cannabis companies have invested massively in production capacities. Large indoor facilities and greenhouses were built, often faster than the market could grow.

In the past, this overcapacity led to price pressure, high stock levels and financial burdens. At the same time, cultivation and operation are capital- and energy-intensive.

Indoor vs. greenhouse

Indoor systems enable consistent quality, but cause high fixed costs. Greenhouses are cheaper but less flexible. According to HKCM, both models are under pressure to remain economically viable.

High capital requirement
Price pressure due to overproduction
Quality as a competitive factor

Delivery routes and regulation

In its webinar, Deutsche Börse emphasizes that cannabis markets are highly regulated. Especially in the medical sector, pharmacies, doctors and government agencies decide on market access.

In Canada, it became clear that even with a legal market, a lack of sales outlets can severely slow down sales. Only the expansion of distribution channels led to more stable sales.

Medical market as a structural anchor

Several sources – including Deutsche Börse and finanzen.net – see the medical market as more stable in the long term. It is growing more slowly, but is less dependent on short-term trends.

Pharmacy-based distribution
Slow scaling
Strong regulatory control

ETFs and market breadth

finanzen.net points out that there are hardly any pure cannabis ETFs in Germany. Although international products do exist, they remain niche products with low liquidity.

Jens Rabe also emphasizes that low ETF volumes are a clear signal: The market has not yet been driven by large capital flows.

Limited selection
Low liquidity
Strongly theme-driven

4 votes and what conclusion?

In summary, the assessments of Jens Rabe, HKCM, finanzen.net and Deutsche Börse show a similar picture: cannabis is a real market with medical benefits, but it is economically complex, politically dependent and strongly characterized by expectations.

“Anyone dealing with cannabis stocks needs to look less at individual prices and more at understanding how cultivation, regulation, distribution and capital flows interact.”

That means: