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The Best-Performing Marijuana Stock of All Time (Hint: It's Probably Not Who You Think It Is)

By Keith Speights - Sep 30, 2018 at 6:33AM

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The biggest market cap or the most hype doesn't always translate to the greatest stock performance.

Sports fans like to argue about which basketball player is the greatest of all time -- the GOAT. Some like Michael Jordan. Others go with Lebron James. Perhaps a few throw out the names of other great basketball players of the past. But the arguments usually aren't settled, mainly because it comes down to personal opinion and which stats receive higher prioritization.

However, no argument is needed when it comes to determining the best-performing marijuana stock of all time. There's a hands-down winner. and it's probably not who you think it is.

An arm sticking out of a pile of money with the hand holding a trophy

Image source: Getty Images.

Runners-up

Let's first acknowledge several marijuana stocks that have performed really well, but not close enough to take the top spot.

You might have thought that Canopy Growth (CGC -3.91%) would be the best-performing marijuana stock of all time. After all, Canopy claims the highest market cap among marijuana stocks. However, Canopy Growth only ranks No. 4 on the list, with the stock generating a return of around 1,460% since going public in 2014.

GW Pharmaceuticals (GWPH) is the No. 3 best-performing marijuana stock of all time. The cannabinoid-focused biotech went public a year before Canopy. GW stock has jumped close to 1,800%, driven by clinical and regulatory success for cannabidiol (CBD) drug Epidiolex. 

The second-place prize goes to Aphria (NASDAQOTH: APHQF). The Canadian marijuana grower's share price has soared over 1,900% since 2015. Like Canopy Growth, Aphria got its start supplying medical cannabis in Canada and is now gearing up for the country's recreational marijuana market.

The best (so far)

Which marijuana stock is the best performer of all time? If you were thinking it's Tilray (TLRY), you'll be disappointed.

Tilray has certainly been the hottest marijuana stock in recent weeks, propelled higher by an epic short squeeze. The stock has fallen from its highs, but even at its peak, Tilray wouldn't have ranked in the top five best-performing marijuana stocks of all time.

The best marijuana stock -- at least so far -- is none other than Cronos Group (CRON -5.08%). And it's not even a close contest. Shares of Cronos Group have skyrocketed more than 6,500% since the company went public in Canada in 2016.  

Why did Cronos outperform all other marijuana stocks? One likely factor is good timing. Cronos stock began trading in the middle of 2016 -- right when excitement about the potential for the legalization of recreational marijuana in Canada began to really intensify. 

It also helped that Cronos Group's market cap in mid-2106 was only a fraction of Canopy's and Aphria's. Starting smaller gave Cronos more room to run.

Cronos Group's decision to list on the Nasdaq stock exchange earlier this year provided another catalyst. This exposed Cronos to more U.S. investors. And it helped the stock benefit more from positive developments for the other two Canadian marijuana stocks listed on U.S. stock exchanges -- Canopy and Tilray. 

Staying at the top?

Despite its more impressive stock gains, Cronos Group has a much smaller market cap than Canopy, Tilray, Aurora Cannabis, and Aphria. Can little Cronos continue to outperform its bigger rivals? Maybe.

Cronos might be smaller than the rest of the pack, but it will still be a significant player in the Canadian recreational marijuana market. The company is boosting its production capacity. It has supply agreements with British Columbia and Ontario, which together hold more than half of Canada's population, and with Nova Scotia and Prince Edward Island. Cronos has also partnered with U.S. marijuana retailer MedMen to launch retail cannabis stores throughout Canada.

The company is also positioned pretty well to compete internationally. Cronos claims distribution partners in Australia, Israel, Latin America, Poland, and, most importantly, Germany -- which is the biggest international marijuana market outside of North America

There are also some wild cards that could work in Cronos Group's favor. The company's partnership with Ginkgo Bioworks to develop high-purity cannabinoids at low costs and commercial scale could pay off in a major way. Cronos could also land a big partner outside of the cannabis industry like Canopy already has done.

Of course, there's no guarantee that Cronos Group's tremendous stock run can continue. The company, like its peers, faces risks that Canadian recreational marijuana demand won't be as great as expected and that the global medical marijuana market won't expand as quickly as hoped. For now, though, only one marijuana stock can legitimately claim to be the GOAT -- and that stock is Cronos.

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Stocks Mentioned

Cronos Group Stock Quote
Cronos Group
CRON
$3.36 (-5.08%) $0.18
GW Pharmaceuticals plc Stock Quote
GW Pharmaceuticals plc
GWPH
Canopy Growth Stock Quote
Canopy Growth
CGC
$5.66 (-3.91%) $0.23
Tilray Stock Quote
Tilray
TLRY

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