Cresco vs. Tilray: Which is the Better Cannabis Stock for Investment?

Cannabis Stocks

As societal attitudes toward cannabis continue to shift and federal legalization potentially looms, multi-state operators in the cannabis sector stand to benefit significantly. With medical cannabis already legalized in 38 states, market analysts project substantial growth in the industry in the coming years. BDSA forecasts U.S. cannabis sales to surge to $32.4 billion in 2024 and reach $46 billion by 2028, primarily driven by the adult-use segment.

The reevaluation of cannabis classification by the U.S. Drug Enforcement Administration in 2024 has sparked increased interest in cannabis stocks. This heightened curiosity, combined with the industry’s growth prospects, has favored companies like Cresco Labs Inc. (NYSE:CRLBF) and Tilray Brands, Inc. (NASDAQ:TLRY), both prominent players in the expanding market.

Cresco Labs: A Closer Look

Cresco Labs Inc. (NASDAQ:CRLBF), headquartered in Chicago, stands as one of the leading multi-state marijuana operators (MSOs) in the U.S. The company is involved in the cultivation, manufacturing, and retailing of premium cannabis products, operating under various brands such as Cresco, High Supply, and Sunnyside. With a market cap of $708.5 million, CRLBF has seen its shares surge by 53.7% year-to-date, significantly outperforming the broader market represented by the S&P 500 Index.

Tilray Brands: An Evaluation

Tilray Brands, Inc. (NASDAQ:TLRY), based in Canada, is a global player in medical cannabis research, cultivation, and distribution. Operating across multiple continents, TLRY offers a range of cannabis, wellness, and beverage alcohol products under brands like Tilray and Aphria. Despite its global presence and market cap of $1.4 billion, TLRY shares have plunged by 13.9% year-to-date, notably lagging behind CRLBF and the S&P 500.

Choosing Between CRLBF and TLRY

While both CRLBF and TLRY stand to benefit from potential federal cannabis legalization, Cresco Labs appears to be a more attractive investment option currently. Tilray’s diversified portfolio, where cannabis represents a diminishing share, coupled with its growth primarily driven by mergers and acquisitions, raises concerns. In contrast, Cresco Labs boasts a more favorable valuation, promising growth prospects, solid financial performance, and stronger stock price appreciation.

In conclusion, considering these factors, Cresco Labs Inc. (NASDAQ:CRLBF) emerges as a preferable investment choice over Tilray Brands, Inc. (NASDAQ:TLRY) at present.

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