3 Cannabis Stocks Ready to Blaze as Regulations Ease

  • Following years of speculation, the U.S. DEA has finally begun moving toward reclassifying cannabis from Schedule I to Schedule III.
  • Cronos Group (CRON): Rooted in innovation, Cronos could change the cannabis industry with its research approach.
  • Tilray Brands (TLRY): Broadly diversified in successful sectors, TLRY could be a safe cannabis entry.
  • Curaleaf Holdings (CURLF): A wellness brand with cannabis at its core, CURLF could be a big player in the cultural shift toward the drug.
Cannabis Stocks - 3 Cannabis Stocks Ready to Blaze as Regulations Ease

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Whatever your opinions on cannabis use might be, it seems as if the current administration has begun to soften the position of federally regulated cannabis. While several states have already legalized the drug for both medical and recreational use, its federal regulation has stood in the way of several high-potential cannabis stocks. These stocks could now begin to surge as the U.S. Drug Enforcement Agency (DEA) of the federal government confirms it will reclassify cannabis from a Schedule I drug to a Schedule III drug.

As a reminder, these drug schedules do not determine nationwide legality, rather they are federal guidelines on the application and safety of the drugs. In the case of cannabis, its Schedule I status had branded it as a compound with no relevant medical applications and significant health risks, putting it in the same category as drugs like heroin and LSD. Now with a potentially new outlook from the government, cannabis research and cannabis stocks could see a new era of growth.

Cronos Group (CRON)

CRON stock: Glass jars filled with medicinal cannabis
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Focused on a highly scientific and granular approach to cannabis cultivation, Cronos Group (NASDAQ:CRON) is one of the more exciting cannabis stocks available to buy. That’s because the company focuses on the development and delivery of what it calls “rare cannabinoids.” 

With this approach, the company hopes to expand the application and experiential spectrum of cannabinoids like tetrahydrocannabinol (THC) and cannabidiol (CBD). These are the two main active ingredients in cannabis, with THC providing the psychoactive effects while CBD is considered more therapeutic. Other cannabinoids exist, but their effects on the human endocannabinoid system are relatively unknown.

Should Cronos uncover more cannabinoids and mass-produce them, it could change the nature of how the cannabis industry operates. That’s because companies may begin to focus on the custom cultivation of cannabis strains that produce unique cannabinoids for their respective applications rather than the current industry standard of improving THC yield or CBD concentration.

Tilray Brands (TLRY)

In this photo illustration, the Tilray Brands (TLRY) logo is displayed on a smartphone screen
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While currently more successful with its alcohol division, Tilray Brands (NASDAQ:TLRY) offers a more stable and established position among cannabis stocks. This is a result of the company’s broad diversification across products both recreational and medical.

Thus, Tilray represents a somewhat safer way to invest in cannabis as its main value drivers don’t 100% rely on cannabis legalization or reclassification. Rather, these products make up a portion of its portfolio which it can strategically manage or sell off in the event of the pendulum swinging the other way on cannabis adoption.

While the stock has tumbled 22% year-to-date, its third fiscal quarter for 2024, reported in April of this year gives insight into the company’s long-term trajectory. The company increased revenue by 23% year-over-year while simultaneously decreasing the cost of revenue by 11%. This trend, should it continue into the next quarterly report, could boost the stock significantly from its current slump.

Curaleaf Holdings (CURLF)

aurora stock
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As it stands now, 350,000 patients rely on Curaleaf Holdings (OTCMKTS:CURLF) for its medical cannabis products. This provides the company with an exceptional opportunity to profit from the legitimization of medical cannabis on a federal level. Beyond the federal regulations, Curaleaf has also intelligently positioned itself as a wellness brand beyond traditional cannabis perceptions. As a result, the company stands more akin to an alternative medicine brand rather than a recreational drug brand and the connotations that come with it.

For consumers, this makes Curaleaf a more likely and comfortable way to begin exploring the effects of cannabis from a wellness perspective rather than a recreational one. This branding strategy is likely to perform very well in the event of broader federal regulatory relaxation as many people hesitant about cannabis shift their perspective. Moreover, the company’s financial performance warrants a close eye, as it has continued on the path toward profitability by increasing income and profit margins.

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

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.

Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.


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