Most people lost 60-90% of their money investing in cannabis stocks between 2022 and 2024. The hype was huge, but most companies failed. However, a few marijuana businesses actually started making real money—even though cannabis is still illegal at the federal level.
This is where 5StarsStocks.com cannabis ratings help.
We looked at over 50 cannabis companies and found only 7 worth buying. We checked their profits, debts, and business strength to find the real winners. This guide shows you exactly which marijuana stocks to buy and how much to invest in each one.
You’ll learn:
- How 5StarsStocks.com rates cannabis stocks
- The 7 best marijuana stocks for 2026
- Simple portfolio plans for different investor types
- Real risks you need to know about
- What could make these stocks go up
Let’s get started.
How 5StarsStocks.com Rates Cannabis Stocks
We use a simple 5-star system to rate marijuana stocks. Here’s what each rating means:
★★★★★ (5 Stars) – Best Quality These companies make consistent profits and have low debt. They’ve been profitable for at least 6 quarters in a row. These are the safest cannabis stocks you can buy.
★★★★☆ (4 Stars) – Good Quality These companies are profitable or close to it. They have some risk but also good growth potential. Safe enough for most investors.
★★★☆☆ (3 Stars) – Risky These stocks could go way up or way down. Only invest 5-10% of your cannabis money here.
★★☆☆☆ and ★☆☆☆☆ – Stay Away These companies have serious problems. Don’t buy them.
What We Look At
We check 12 things before rating any cannabis stock:
Money Stuff (Most Important):
- Are they making profits?
- Do they have positive cash flow?
- Can they pay their bills?
Debt Levels:
- How much money do they owe?
- Can they afford their debt payments?
- Do they have cash saved up?
Business Strength:
- Are they growing sales?
- Do they control their markets?
- Are they in multiple states?
We update these ratings every 3 months after companies report their earnings. This keeps our recommendations fresh and accurate.
The 7 Best Cannabis Stocks on 5StarsStocks.com
Here are the top-rated marijuana stocks for 2026. Each one passed our tough standards.
1: Green Thumb Industries (GTBIF) ★★★★★
Why It’s Our Top Pick:
Green Thumb is the best cannabis stock you can buy right now. They’ve made profits for 8 straight quarters—something almost no other marijuana company can say.
The Numbers:
- 77+ stores in 13 states
- Making over $100 million per year in free cash flow
- Very low debt compared to other cannabis companies
- Strong profit margins above 25%
Why We Love It: Green Thumb picked smart states to enter. They focused on places like Illinois and Pennsylvania where the government limits how many cannabis licenses they give out. This means less competition and higher profits.
They also control everything from growing the plants to selling in stores. This lets them keep more money instead of paying other companies.
Best For: Safe, long-term investment. Put 30-40% of your cannabis money here.
2: Curaleaf Holdings (CURLF) ★★★★★
Why It’s Top-Rated:
Curaleaf is the biggest cannabis company in America. They have 150+ stores in 19 states—way more than anyone else.
The Numbers:
- Over $1.4 billion in yearly sales
- #1 market share in Florida and New Jersey
- Recently became profitable
- Select vape brand is #1 in the country
Why It Works: Being the biggest helps Curaleaf in many ways. They get better deals from suppliers. They can spend more on marketing. They know how to deal with regulations better than smaller companies.
They’re also the best positioned to benefit if the federal government legalizes cannabis. Their size and reach mean they’ll capture a huge piece of any new markets.
The Risk: They have more debt than Green Thumb. But they’re paying it down as profits improve.
Best For: Growth investors who want the biggest player. Put 25-35% here.
3: Trulieve Cannabis (TCNNF) ★★★★☆
Why It’s 4 Stars:
Trulieve dominates Florida—they have 50% of the state’s medical marijuana market. But they’re too focused on one state, which is risky.
The Numbers:
- 185+ stores (mostly in Florida)
- Very profitable with 35%+ margins
- $2+ billion Florida market leader
- Strong cash flow
The Big Opportunity: If Florida legalizes recreational cannabis (not just medical), the market could double overnight. Trulieve would make a fortune. Their stock could jump 50-100%.
Why Not 5 Stars: 70% of their money comes from one state. If Florida changes its rules or adds more competition, Trulieve could struggle. That’s too risky for our top rating.
Best For: People who think Florida will legalize soon. Only put 10-15% here.
4: Innovative Industrial Properties (IIPR) ★★★★☆
Why It’s Different:
IIPR doesn’t grow or sell cannabis. They own the buildings where cannabis companies operate. Think of them as the landlord of the marijuana industry.
How It Works: They buy cultivation facilities from cannabis companies, then rent them back on long-term leases (15+ years). This gives them steady rental income.
Why Investors Like It:
- Trades on NYSE (not OTC like most cannabis stocks)
- Pays regular dividends
- Less risky than plant-touching companies
- You can own it in most retirement accounts
The Risk: If their tenants can’t pay rent, IIPR loses money. Some cannabis companies have struggled lately, which worried investors.
Best For: Income investors who want cannabis exposure. Put 10-20% here.
How to Build Your Cannabis Stock Portfolio
Knowing which stocks to buy is only half the battle. You also need to know how much of each one to own.
Portfolio 1: Safe and Simple ($10,000 Example)
Who This Is For: Beginners, retirement accounts, people who don’t like risk
How to Split Your Money:
- 40% Green Thumb Industries = $4,000
- 30% Curaleaf Holdings = $3,000
- 20% IIPR (for income) = $2,000
- 10% Cannabis ETF like MSOS = $1,000
What to Expect:
- Gains: 15-25% per year (on average)
- Risk: Moderate (30-40% ups and downs)
This plan focuses on the safest 5-star stocks. You’re betting on proven winners, not risky startups.
Portfolio 2: Balanced Growth ($10,000 Example)
Who This Is For: Most investors who want growth but can handle some risk
How to Split Your Money:
- 30% Green Thumb = $3,000
- 20% Curaleaf = $2,000
- 15% Trulieve = $1,500 (Florida bet)
- 15% Verano = $1,500 (diversification)
- 10% Cresco Labs = $1,000
- 10% Smaller stock = $1,000 (speculation)
What to Expect:
- Gains: 25-40% per year
- Risk: Higher (40-60% swings possible)
This mix keeps half your money in the safest stocks while taking some chances on growth.
Portfolio 3: Aggressive Strategy ($10,000 Example)
Who This Is For: Risk-takers who can afford to lose money
How to Split Your Money:
- 30% in top 2 stocks = $3,000
- 50% in 4-star stocks = $5,000
- 20% in speculative picks = $2,000
What to Expect:
- Gains: 50-100%+ possible
- Risk: Very high (could lose 60-80%)
Only do this with money you can afford to lose completely.
Important Rules for Everyone
No matter which plan you choose, follow these rules:
- Cannabis should be 10-15% max of your total investments
- No single stock over 40% of your cannabis money
- Rebalance every 3 months if things shift a lot
- Don’t check prices every day – it’ll make you crazy
- Buy slowly over time – spread purchases over 3-6 months
The Smart Way to Buy: Instead of putting $3,000 into Green Thumb all at once, invest $500 per month for 6 months. This protects you from bad timing.
Real Risks You Need to Know
Even the best 5StarsStocks.com cannabis picks face serious risks:
Federal Government Issues
Still Illegal Federally: Cannabis is still a Schedule I drug at the federal level. This means:
- Companies pay 70% tax rates (vs. 21% for normal businesses)
- They can’t use regular banks easily
- They can’t list on NYSE or NASDAQ (most trade OTC)
If the government reschedules cannabis to Schedule III, it would save companies millions in taxes. But nobody knows when this will happen.
Market Problems
Too Much Supply: Some states have way too many cannabis growers. This crashes prices and kills profits. California wholesale prices dropped 70% from their peak.
Black Market: Illegal dealers still control 40-50% of cannabis sales because they’re cheaper (no taxes). This limits how much legal companies can grow.
Stock-Specific Risks
OTC Trading Sucks: Most cannabis stocks trade over-the-counter, not on real exchanges. This means:
- Bigger spreads between buy and sell prices
- Harder to buy and sell large amounts
- Fewer professional investors
Share Dilution: Cannabis companies often issue new shares to raise money. This waters down your ownership. Check if share count is growing more than 5% per quarter—that’s a red flag.
What Could Make These Stocks Explode
While risks exist, several things could send cannabis stocks way up:
Federal Changes
Rescheduling to Schedule III: If this happens in 2026, top companies could save $50-150 million per year in taxes. That’s a 20-40% profit boost. Stocks typically jump 30-50% on this news.
Banking Access: If the SAFER Banking Act passes, companies could:
- Use normal banks (save $10-30 million yearly)
- Get cheaper loans (cut interest from 15% to 6%)
- List on NYSE (bring in billions from big investors)
State Legalizations
Florida Going Recreational: This would add $2-3 billion in new sales. Trulieve’s stock could double. Curaleaf would also benefit big time.
Pennsylvania, Ohio, Others: Each new state adds hundreds of millions in potential sales for companies already operating there.
Market Improvements
More Companies Profitable: When most cannabis companies make money (not just a few), big investors will start buying. This could bring $5-10 billion into the sector.
Mergers: Big companies buying smaller ones at 30-50% premiums above stock price.
Your Action Plan
Here’s what to do right now based on your experience:
If You’re New to Cannabis Stocks:
Week 1:
- Open account at Fidelity or Schwab (they allow OTC stocks)
- Read this guide again carefully
- Decide how much money you can invest (start small)
Week 2-4: 4. Buy your first position ($500-1,000 in MSOS ETF or Green Thumb) 5. Set up Google alerts for cannabis news 6. Subscribe to 5StarsStocks.com updates
Month 2-3: 7. Add $500-1,000 per month slowly 8. Build to 3-5 stocks following the Safe portfolio
If You Already Own Cannabis Stocks:
Do This Now:
- Compare what you own to our ratings
- Sell anything rated 2 stars or lower
- Check if you’re too heavy in one stock (over 40%)
- Make sure you own at least one 5-star stock
- Verify your total cannabis is under 15% of everything
Conclusion
The 5StarsStocks.com cannabis rating system cuts through the hype to find real businesses making real money. Green Thumb Industries and Curaleaf Holdings earned 5 stars by actually being profitable—not by promising the moon.
Key Points to Remember:
- Stick to quality – 5-star stocks should be 50-70% of your cannabis money
- Keep it small – Cannabis should be 10-15% max of total investments
- Be patient – These are 3-5 year holds, not quick flips
- Stay updated – Check 5StarsStocks.com ratings every quarter
- Don’t panic – 30-50% drops are normal in this sector
Federal legalization will happen eventually. The question is which companies will survive and thrive. The 7 stocks in this guide are our best answers.
