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Here are the top 5 marijuana stocks with the best value, the fastest growth, and the most momentum.

These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.

Best Value Marijuana Stocks

On March 31, 2021, New York passed a law legalizing recreational cannabis, expanding medical use, and decriminalizing possession of small amounts of marijuana, among other measures. Not all of these provisions will go into effect immediately and there is no timeline yet on when all these measures will be fully implemented.

Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.

The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal, and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth, which remained strong despite the economic disruption caused by the global pandemic.

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The legal marijuana industry, 101.

The marijuana industry is expected to add 200,000 new jobs in the U.S. by 2020, according to New Frontier Data, which provides research on the cannabis market.

Investing in Cannabis: Single stocks

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Data sources: Yahoo! Finance, Bloomberg. Data current as of July 12, 2021.

The three primary types of companies in the marijuana industry are:

What’s the best approach to marijuana stock investing? Follow these seven key steps to become a successful cannabis investor:

4. Know what to look for in a top marijuana stock.

Here’s all you need to know about each of these seven steps.

Investing in marijuana companies in not right for everyone. For some, particularly conservative investors, the best approach is to avoid these types of stocks entirely. Only investors who understand and can tolerate high levels of risk should add cannabis companies to their portfolios.

For marijuana growing companies, specific metrics to research include:

Marijuana industry investors should closely monitor any marijuana stocks or ETFs in their portfolios, along with the overall industry itself. Some changes — such as if the U.S. federal government relaxed its marijuana laws — would be beneficial, while other changes could be devastating.