Among the emerging industries that have captured the attention of investors is the cannabis sector. The cannabis industry has experienced remarkable growth, giving rise to a new breed of top cannabis stocks to buy for investments in May.

Although the results so far from the cannabis industry have disappointed many investors, I feel that the long-term prospects remain promising. While the initial hype and optimism surrounding the legalization of cannabis may have led to unrealistic expectations, it is important to recognize that this industry is still in its infancy, and its true potential has yet to be fully realized.

The current disappointment can be attributed to several factors, including regulatory hurdles, supply chain challenges, and intense competition within the market, still the overall growth and trajectory of the market remains positive.

So here are seven cannabis stocks to buy for investors to consider for May this year.

Canopy Growth (CGC)

Established in 2009, Canopy Growth (NYSE:CGC) was the first cannabis company to trade on the NYSE. 

In fiscal year 2023, CGC faced several challenges. The company reported a net revenue decline of 21% year-over-year, amounting to $403 million. This downturn was primarily due to increased competition in the Canadian adult-use cannabis market and the divestiture of certain business units.

Looking forward to this year, however, CGC is focusing on a few strategic areas to drive growth. The company aims to enhance its financial standing by targeting an “asset light” business model, which includes reducing its cost of goods sold (COGS) and selling, general, and administrative expenses (SG&A) by $270 to $300 million in total. Innovations are on the horizon for its product lines. For instance, Storz & Bickel is anticipated to launch new vaporizers in FY2024, which are expected to contribute to revenue growth.

CGC’s valuation could be too cheap for investors to ignore, which makes it one of those cannabis stocks to buy.

Aurora Cannabis (ACB)

Aurora Cannabis (NYSE:ACB) has a strong presence in over 25 countries. Known for its medicinal cannabis production.

ACB is focusing on stabilizing and growing revenue across various segments. The company expects steady revenue from Canadian medical and consumer segments and anticipates modest growth in Europe and Australia.

Analysts maintain a “Hold” rating with price targets suggesting a potential moderate increase in stock price. The estimated price targets reflect an upward potential of 18.59% to 48.24%.

However, ACB’s forecast for its EPS is strong. It’s expected to reach a positive number sometime around FY2025, with it reaching a triple-digit growth rate in FY2026. I think then it could be a good way to enter the market, especially if one is bullish on the medicinal cannabis segment.

It should be noted that these EPS growth projections also come with top-line revenue increases as well, which could further bolster its valuation.

Tilray (TLRY)

Tilray (NASDAQ:TLRY) merged with Aphria in 2020, becoming one of the largest cannabis companies globally. 

Tilray is poised for continued growth in 2024. Key strategies include optimizing its brand portfolio and expanding distribution networks in the U.S., Canada, and Europe. Additionally, Tilray is focused on increasing its medical cannabis market share internationally.

The reason I like TLRY is that it has managed to pull off what many cannabis stocks have struggled with in the past. It has successfully reduced its debt significantly, enhancing its financial flexibility. The company also achieved considerable operational synergies and cost savings from recent acquisitions, which are expected to contribute to further financial stability and growth.

Notably, the company achieved record net revenues in multiple quarters, with a marked increase in the fiscal third quarter of 2024 compared to the previous year. This growth was supported by strong sales in Canadian cannabis operations.

Leafly Holdings (LFLY)

Leafly Holdings (NASDAQ:LFLY) focuses on the recreational cannabis market. Despite its smaller market cap, it’s recognized for its influential role in cannabis cultivation and production.

For the first quarter of 2024, Leafly forecasts revenue around $9 million and anticipates an adjusted EBITDA loss of approximately $1 million. The company is focused on overhauling its revenue operations and enhancing its sales structure.

Last year, LFLY’s average revenue per account (ARPA) increased by 21%, indicating a shift towards higher-value accounts. The company ended the year with $15.3 million in cash and is prioritizing addressing its liquidity issues as it faces $29.7 million in convertible notes due in 2025​.

LFLY trades at just $2.93 per share, and its stock price has fallen 64.44% over the past year alone. Due to its capital and debt structure, LFLY could be seen as risky and speculative, but it may make up for iit through offering a stronger implied upside.

Jazz Pharmaceuticals (JAZZ)

Jazz Pharmaceuticals (NASDAQ:JAZZ) became a notable player in the cannabis pharmaceutical sector by acquiring GW Pharmaceuticals in 2021, maker of the FDA-approved, cannabis-based drug Epidiolex, for the treatment of epilepsy.

JAZZ reported strong financial results in 2023, with total revenues reaching $3.8 billion, a 27% year-over-year increase.

The company is now focusing on expanding its neuroscience and oncology portfolios, including advancing late-stage clinical trials and new drug applications. Jazz’s strategic priorities include further integration of GW Pharmaceuticals’ capabilities, especially in cannabinoid-based treatments.

The reason I like JAZZ is that the company is pursuing a number of diversified pipelines, as opposed to putting all of its eggs in one basket. This could then reduce risk, and also give investors exposure to the pharmaceutical industry as well as having a strong presence in the cannabis sector. 

Curaleaf Holdings (CURLF)

Curaleaf Holdings (OTCMKTS:CURLF) leads in the industry in the U.S. and Europe. Despite not trading on a major U.S. exchange, its size and scope make it a significant entity for investors to pay attention to.

The company’s revenue for the fourth quarter was reported at $345.27 million, exceeding analyst expectations. Over the year, Curaleaf successfully expanded its market presence, including rebranding initiatives in Arizona and the UK, and acquiring a pharmaceutical wholesaler in Poland.

The reason I like CURLF is its recent acquisition of Northern Green Canada is a strategic move to bolster its position in key emerging markets, including Australia, New Zealand, Germany,  and boland. This expansion aligns with its goal to be a global leader in the cannabis industry.

Also, despite being an OTC stock, CURL is one of the largest companies in the U.S. market via market cap and revenue, which means it has a commanding share of the market.

Cronos Group (CRON)

Cronos Group (NASDAQ:CRON) made notable progress in 2023, achieving a significant improvement in its financial health. The company managed to reduce its adjusted EBITDA loss by $8.7 million compared to the previous year, primarily through reductions in general and administrative and research and development expenses. This was part of a broader initiative to cut operating expenses, which exceeded its target, achieving $30 million in savings​.

The company plans to save an additional $5 to $10 million in operating expenses. These savings are expected to come mainly from general and administrative and research and development costs. Cronos Group also expects positive net changes in cash for the year.

CRON also continues to strengthen its brand portfolio, particularly with its Spinach brand in Canada, which has seen significant growth across various cannabis product categories. Spinach now holds a leading position in the edibles market and is growing in other categories like flowers, vapes, and pre-rolls.

CRON is therefore showing strong promise in the edibles sector of the industry, which makes it one of those cannabis stocks for investors to consider.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.