Which Cannabis Stock Should You Buy Today: Village Farms (TSX:VFF) or Charlotte’s Web (TSX:CWEB)?

It’s earnings season and two cannabis stocks look like solid buys. Should you invest in Charlotte’s Web Holdings Inc. (TSX:CWEB) or its competitor?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cannabis sector holds plenty of value opportunities at the moment as investors eye missed earnings expectations across the board. While momentum investors are cashing in, though, longer-term investors with an eye for quality have some decent plays at the moment.

For a mix of value, quality, performance, and long-term prospects, here are two of the best stocks for new cannabis investors to buy today.

A strong play for greenhouse expertise

Village Farms (TSX:VFF)(NASDAQ:VFF) has a lot going for it, though investors who bought the stock for its mix of cannabis and consumer staples exposure may be concerned that the vegetable growing side of its business may eventually fall by the wayside.

For a new investor coming to cannabis stocks for the first time, though, one of the most positive aspects of its third-quarter results is that Pure Sunfarms dried flower products have captured 16% of the market share and secured the top spot for such sales in October in the Ontario Cannabis Store.

This kind of performance is exactly what new investors seeking early front-runners in the legal cannabis space should be looking for. Along with strong sales, Village Farms’ Q3 showed that three of the best performing dried flower brands on the OCS were Pure Sunfarms products. The Delta 3 greenhouse also got a mention, with production hitting 75,000 kg at the 1.1 million square foot facility.

CEO Michael DeGiglio summed up the performance: “In the 12 months since adult-use cannabis was legalized in Canada in October 2018, Pure Sunfarms has already generated C$47 million in EBITDA, an especially impressive number given that its operations were ramping up throughout most of that period.”

A brand-focused play for the long-term

Charlotte’s Web (TSX:CWEB) has long appeared one of the stronger plays in the cannabis space, and its Q3 report contains a nugget of gold that some investors may be overlooking: Positive year-on-year revenue growth. While growth is slowing, it’s still there – in stark contrast to other cannabis companies that are losing money hand over fist. Indeed, Charlotte’s Web is looking like an early leader in the CBD space.

As a longer-term play on eventual dominance in a presently crowded marketplace, Charlotte’s Web exists in that sweet spot where quality and value meet. While growth is flat sequentially and operating costs are up in the third quarter for Charlotte’s Web, earnings still beat reasonable expectations.

And like most stocks in the cannabis space, Charlotte’s Web is trading well below its 52-week high, meaning that new investors don’t have to worry too much about the loss of momentum that stung early marijuana investors. The fact that Charlotte’s Web has pulled in solid year-on-year revenue growth of 41.8% is also encouraging.

The bottom line

One of the main things that cannabis investors need to be looking at for longer-term positions is management. Both Village Farms and Charlotte’s Web have strong management, which means that, combined with steady operational results, both these companies could succeed long-term in the crowded marijuana space. Right now, though, Charlotte’s Web looks like the stronger of the two.

Should you invest $1,000 in Restaurant Brands International right now?

Before you buy stock in Restaurant Brands International, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Restaurant Brands International wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Charlotte's Web Holdings and Village Farms International, Inc.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Stocks for Beginners

rail train
Dividend Stocks

Best Stock to Buy Right Now: CN Rail vs CP Rail?

Both these railway stocks have a strong future outlook, but which offers more value, and which more growth?

Read more »

Group of people network together with connected devices
Tech Stocks

If I Could Buy and Hold Only a Single Stock, This Would Be it

If there's one industry that's already proven itself, it's this one. And this tech stock is proving again and again…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Stocks for Beginners

What to Know About 2 Canadian Mining Stocks for 2025

Mining stocks can be a strong investment, or a bit of a wild ride. So where do these two top…

Read more »

calculate and analyze stock
Dividend Stocks

Outlook for Restaurant Brands International Stock in 2025

QSR stock has had a turbulent few years, but investors may not want to count out the stock just yet.

Read more »

Beware of bad investing advice.
Stocks for Beginners

Top 5 Stock Market Mistakes for New Investors to Avoid

New investors can better build their wealth by avoiding these top stock market mistakes.

Read more »

Investor reading the newspaper
Stocks for Beginners

Invest for Tomorrow: 3 TSX Stocks to Build Lasting Wealth

Want stability and long-term growth? These three TSX stocks have proven their worth time and time again.

Read more »

nuclear power plant
Stocks for Beginners

What to Know About Canadian Infrastructure Stocks for 2025

Infrastructure companies are strong long-term investments no matter the market, and these three Canadian stocks look primed to grow.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution for Long-Term Gains

Whether it's infrastructure, real estate or tech, these three stocks offer a promising addition to your TFSA.

Read more »