Marijuana is legal in more than a dozen countries while others have mixed laws that allow its use for either recreational or medical purposes—or both. Uruguay was the first country to legalize it for recreational purposes. Jamaica decriminalized cannabis in 2015 and the country saw its first medical dispensary open up three years later.
In October 2018, marijuana became legal for recreational and medical use in Canada. As of July 2021, 18 states, two territories and the District of Columbia legalized recreational marijuana. A total of 36 states and three territories legalized medical marijuana
The global marijuana market was estimated to be worth $9.1 billion in 2020 and is expected to grow 26.7% between 2021 and 2028. This growth is expected to be fueled by an increase in demand (thanks to the increasing degree of legalization around the world) along with a rise in the use of medical marijuana. Legal marijuana companies are able to leverage one important advantage, which makes them slightly different from those in the tech sector. While tech companies often need to create demand or to educate their consumer base, marijuana startups face no lack of demand—especially in North America.
Investors who once backed tech firms are now funneling capital into the cannabis industry. PayPal co-founder, Peter Thiel's Fund became the first institutional investor to put money into the legal marijuana industry. The fund was the lead investor in Privateer Holding's Series B funding worth $75 million in April 2015. Privateer Holdings has multiple cannabis investments.
Snoop Dogg is another notable investor in the industry. The rapper makes no secret of his affinity for marijuana and is the director of Casa Verde Capital, a venture capital fund that invests in cannabis startups. The company's portfolio includes names like Dutchie, Green Tank, and Cannalysis. Venture funding for marijuana startups seems to be pouring in from all directions. Commonly referred to as potpreneurs, marijuana startup leaders are betting heavily on the potential for increased legalization.
Weedmaps was founded in 2008 and is based in Irvine, California. It expanded and now has offices in New York, Barcelona, Denver, Tucson, and Toronto. Weedmaps was the first marijuana tech and media brand which provides cloud-based software and data solutions to those within the marijuana industry. It also offers an app that connects consumers with dispensaries. The company was acquired by Grow One in 2015.

Ayr Wellness Inc. (AYR.A.CX) Ayr Wellness is a cannabis company involved in the cultivation, manufacturing, dispensing of cannabis and cannabis-derived products. The company's product portfolio includes flowers, tinctures, edibles, and vape products under brands including Kynd, Sira Naturals, Entourage, Highly Edible, Cannapunch, and Lit Cartridges. Ayr Wellness also trades OTC in the U.S. under the ticker AYRWF. The company recently announced that it has completed its acquisition of Garden State Dispensary NJ LLC, one of 12 vertical permit holders in New Jersey, for total upfront consideration of $101 million. Any earnouts based on exceeding revenue target thresholds in 2022 will be capped at a maximum of $97 million.
The marijuana industry is expected to expand at a compound annual growth rate of at least 25% through 2030, and many investors are seeking to profit. As states and entire countries decriminalize or legalize cannabis and/or its components, there are growing opportunities for entrepreneurs and existing companies.
But, as in any nascent industry, there are also plenty of investment risks. Whether you're a first-time investor or a seasoned veteran, it pays to understand how this industry works. This guide will get you up to speed quickly and includes our picks for the top marijuana stocks.
The marijuana industry is divided into three broad categories:
Marijuana growers and retailers cultivate and package cannabis products and sell them to consumers. Biotechnology companies develop and market cannabis-based pharmaceutical drugs. Ancillary marijuana businesses provide products and services to cannabis companies without touching the plant.
Cannabis can be medical or recreational: Medical cannabis patients use cannabis or cannabis extracts to treat health conditions and have recommendations or cannabis prescriptions from physicians. Recreational cannabis users purchase marijuana or cannabis extracts purely for enjoyment and must be 18 and older and living in a jurisdiction where recreational use of the plant is legal.
Geography matters: Medical cannabis is legal in many more countries than recreational cannabis. In the U.S., cannabis remains illegal at the federal level. However, a growing number of states have legalized medical and/or recreational cannabis. The rapid growth of the U.S. cannabis market is translating into impressive growth by U.S.-based cannabis companies, while marijuana companies in Canada -- where the plant is already fully legal nationwide -- are expanding more slowly. Canada is one of the global legal markets where supply is outpacing demand and leading to falling cannabis prices.
The COVID-19 pandemic affected nearly every part of the global economy, including the cannabis industry. In many U.S. states, cannabis dispensaries were designated as essential businesses. Cannabis sales boomed in some states during the first few months of the coronavirus outbreak, driven in part by more time spent at home and increased anxiety. Marijuana growers and retailers benefited, as did ancillary providers selling gardening supplies and other products to these companies.
However, not all cannabis companies fared well in the pandemic. Recreational cannabis retailers in tourist destinations such as Las Vegas saw their customer traffic dwindle, causing some of these dispensaries to start focusing on home delivery. In the medical segment, people delayed doctor visits, causing new patient starts to drop. Biotech companies experienced logistical challenges that affected sales and research progress.