However, controversies aside, the cannabis industry is creating some interesting opportunities for investors. More businesses are developing medical and consumer healthcare products using the young commodity. And consequently, market forecasts indicate potentially explosive growth over the next decade.

With that in mind, let’s dive into the world of UK cannabis stocks and see which businesses are leading the charge.

What are cannabis stocks?

As the name implies, cannabis stocks consist of any business using marijuana to create a legal product for other companies or consumers. The sector is still in its infancy, but it can be broken down into three primary categories:

• Growers & Retailers – Companies creating consumer products with cannabis.
• Medical – Pharmaceutical and biotech firms are creating medicinal marijuana products for patients.
• Ancillary – Groups providing products or services to other cannabis companies.

As such, there are a vast number of products coming out of this young industry, including food, beverages, lotions, oils, perfume, and medicine, just to name a few.

Typically, a commodity with this many applications doesn’t create a high barrier to entry. However, in the case of marijuana shares, the story is quite different. The regulatory environment surrounding cannabis in most nations is unsurprisingly strict. And the UK is no exception.

Most cannabis-based products require regulatory approval before they can be sold to consumers. And in the case of UK medical marijuana firms, additional authorisation from the Medicines and Healthcare Products Regulatory Agency (MHRA) is also necessary, which can be both time-consuming and expensive.

Needless to say, this does elevate the risk profile. And subsequently, cannabis shares are often synonymous with volatility. But there are also stories of immense growth potential, so the risk does come with potentially higher rewards for investors.

Top marijuana shares in the UK

Many cannabis has struggled to penetrate their markets, resulting in most failing, relisting in other markets, or returning to the private markets. However, as of February 2026, a few remain on the London Stock Exchange:

Associated British Foods

Associated British Foods is not the most well-known cannabis stock. After all, this is the company behind many popular food brands, including Kingsmill bread and Blue Dragon cooking sauces. It’s also the parent company of clothing retailer Primark.

However, in 2017, the group’s subsidiary, British Sugar, signed a deal with GW Pharmaceuticals (now owned by Jazz Pharmaceuticals) to supply M250 marijuana for drug development purposes. M250 contains high concentrations of the active ingredient cannabidiol without producing a psychoactive effect. In other words, the plants can’t be harvested for recreational marijuana purposes.

Subsequently, Associated British Foods converted around 45 acres of tomato greenhouse space to grow hemp plants, making it one of the largest licensed cultivators in the UK.

Futura Medical

Futura Medical is an early-stage research and development pharmaceutical company. The group focuses on novel treatments aimed at sexual health and pain relief using its proprietary DermaSys technology.

This enables active pharmaceutical ingredients to be formulated into a gel absorbed directly through the skin. As such, it’s a highly targeted solution that’s proving to be successful with its flagship MED3000 erectile dysfunction treatment and its TPR100 non-steroidal anti-inflammatory treatment.

However, as it turns out, DermaSys is entirely compatible with cannabidiol. And the company has since begun developing a new gel called CBD100 in a joint venture with CBDerma Technology. While it’s still in the early stages of development, initial lab testing showed promising results for this future cannabis stock.

Consequently, management has begun exploring commercialisation options for new cosmetic, dermal, and pain relief treatments using cannabidiol as the primary ingredient.

Investing in the United States’ marijuana industry

American cannabis stocks have to navigate a more complex regulatory environment. Currently, 40 states have legalised marijuana for medical use, with 24 allowing for recreational purposes as well. However, on a federal level, it remains a controlled substance, which significantly limits the geographic expansion of these businesses.

In April 2022, the US House of Representatives passed a new bill to legalise cannabis on a federal level. However, it ultimately failed to pass the Senate.

As such, the prospects for Federal legalisation of cannabis remain distant. However, in 2022, the US government began making moves to reclassify the drug from Schedule I to Schedule III – a significant but still incremental development.

Some leading American cannabis stocks in order of market cap as of February 2026 are:

1. Jazz Pharmaceuticals (NASDAQ:JAZZ) – $10.5bn
2. Scotts Miracle-Gro (NYSE:SMG) – $4.0bn
3. Innovative Industrial Properties (NYSE:IIPR) – $1.3bn
4. GrowGeneration (NASDAQ:GRWG) – $64.6m
5. Hydrofarm Holdings Group (NASDAQ:HYFM) – $6.2m

Are cannabis shares right for you?

Just looking at these five cannabis stocks, an investor who bought equal positions in each over the last five years is probably quite disappointed. That’s because collectively, these shares have fallen drastically.

Seeing such poor performance from an unproven industry isn’t exactly surprising. And demonstrates the risks of being an early investor. That’s why investing in marijuana stocks is not suitable for everyone.

Having said that, industry forecasts predict enormous growth over the next decade. If these prove to be accurate, the cannabis market could be an explosive opportunity for risk-seeking investors.

We recommend taking a diversified approach. It’s pretty challenging to determine which companies will become future titans at this stage. And by owning a collection of promising businesses, the odds of finding a winner increase.

The post Top UK Cannabis Stocks of 2026 appeared first on The Motley Fool UK.

Across North America, there seems to be a steady march towards decriminalising the possession and sale of marijuana. Many US states have legalised recreational cannabis use, including the most populous state, California, back in 2016. In Canada, recreational cannabis has been legal since 2018, while Mexico allows cultivation for personal use.

I think there’s been a cultural shift where using cannabis is now as socially permissible as tobacco.  Tobacco companies including Imperial Brands and British American Tobacco are some of the highest performing dividend stocks available. Cannabis stocks could soon be just as profitable.

Miracle cannabis stock?

Scotts Miracle-Gro (NYSE: SMG) used to only sell generic gardening equipment. Now, thanks to its subsidiary, Hawthorne Gardening Company, it offers everything that cannabis growers need to farm their product. This includes grow lights, fertiliser, and hydroponic nutrient solutions. 

Revenue was $4.1bn for FY2020, which was up by 31% year-over-year. Hawthorne generated $1.1bn of these sales, representing a 61% increase year-over-year. 

By Q3 2021, the company brought in $1.6bn in revenue, an 8% rise year-over -year. Moreover, the Hawthorne division saw revenue surge 48% from $285.7m to $421.9m. As more states loosen their cannabis laws, there’ll be an increasingly large market to capture. And as a industry supplier, it doesn’t have the same risks of dealing with changing tastes or crop failures.

Acquisitions and growth

The company has been on an investing splurge. Last week, Hawthorne invested $150m into Canadian RIV Capital, which is planning to move into the US market this year. Yesterday, the company announced it has invested $3.2 million into Dewey Scientific, an agricultural technology company that specialises in improving the genetic diversity of cannabis crops.

It’s also spending another $65m acquiring HydroLogic Purification Systems, which sells water filtration and purification solutions to corporate cannabis growers.

After releasing Q3 2021 results, CEO James Hagedorn said that “this industry is poised for significant growth. And given our track record, I believe we have an absolute right to win here.” He expects revenue growth of between 17% and 19% for FY 2021, with Hawthorne’s sales rising between 40% and 45%.

Potential side-effects

The day Q3 2021 results were released, SMG stock tumbled by 6.7%. The share price has been falling consistently since April, and could fall further before stabilising.

There’s also the risk that future state legislatures might roll back decriminalisation. Some banks and venture capital funds refuse to lend to cannabis companies because of this future legal uncertainty. Cannabis companies often get around this by creating more shares to raise capital. This results in share dilution, which reduces the value of pre-existing shares. This is exactly what happened with competitor Sundial Growers. Its share price rallied to $252 in April, spurred on by Reddit investors. It has since fallen to a more realistic price of $150.

With a price-to-earnings (P/E) ratio of only 15, Scott Miracle-Gro is still the cannabis stock I’d buy for my portfolio.

The post Cannabis stocks: 1 I’d buy before it explodes appeared first on The Motley Fool UK.

When most investors think about marijuana stocks, one like Canopy Growth Corporation(NYSE:CGC) probably comes to mind. The company cultivates and produces cannabis products, including flower and oils. But while The Scotts Miracle-Gro Company (NYSE:SMG)is still best known for its consumer lawn and garden products, it too has become a marijuana stock by emerging as the leading supplier to the U.S. cannabis industry.

There’s no contest between these two stocks when it comes to year-to-date performance. Canopy Growth is up close to 80%. Scotts is down more than 25%. But which of these stocks is the better choice for long-term investors?

IMAGE SOURCE: GETTY IMAGES.

The case for Canopy Growth

Any argument about the merits of investing in Canopy Growth has to start with the tremendous growth opportunity for the global cannabis industry. Countries around the world have legalized medical marijuana. Canada and Uruguay have legalized recreational marijuana, along with 10 U.S. states plus the District of Columbia. Some project that the global marijuana market will top $100 billion and perhaps a lot more within the next 15 years.

Canopy Growth appears to be in the best position of any company to capitalize on this market. It currently has 4.3 million square feet of licensed growing space in Canada. With its subsidiaries, Canopy claims a whopping 5.6 million square feet of growing space.

Production capacity is one key to success for Canopy Growth. Its distribution channels are another. Canopy lined up supply agreements for the recreational marijuana market in all of Canada’s provinces and territories that have announced supply plans. The company is moving forward aggressively with its retail strategy as well.

Earlier this year, major alcoholic-beverage company Constellation Brands invested $4 billion in Canopy Growth, boosting its stake in Canopy to 38% with an option to acquire even more shares. This deal solidified Canopy Growth’s status as the leading player in the cannabis industry and gave the company a big cash stockpile to expand its operations. Constellation Brands and Canopy Growth plan to launch cannabis-infused beverages in Canada when regulations are finalized for these types of products. 

Canopy Growth already has a presence in multiple international medical marijuana markets, including Australia, South America, Africa, and Europe, particularly in Germany. The company is poised to enter any other countries with federal laws that allow the legal sales of marijuana.   

The case for Scotts Miracle-Gro

Growth for the global cannabis industry is also a key part of the investing thesis for Scotts Miracle-Gro. But the focus for Scotts is on the U.S. market.

That’s actually a big plus for Scotts. The U.S. currently generates roughly 85% of total legal marijuana sales worldwide. That percentage will decline somewhat over the next few years as the markets in other countries expand. But the U.S. will continue to be the big prize for marijuana businesses for a long time to come.

Thanks to a string of acquisitions, Scotts Miracle-Gro has become the go-to supplier for U.S. marijuana growers. The company’s Hawthorne Gardening subsidiary provides a wide range of products, including fertilizers, hydroponics, lighting systems, irrigation systems, and ventilation systems.

Hawthorne Gardening makes the lion’s share of its money now in California. That’s not surprising, since it’s the largest marijuana market in the U.S. by far. However, the company has tremendous growth potential in other states — especially those that legalize recreational marijuana.

Still, Scotts Miracle-Gro’s marijuana-focused business generates only around 8% of the company’s total revenue. The rest comes from its core lawn and garden business. Scotts is launching new products and raise prices in 2019, moves that should boost its revenue. And with warmer weather conditions likely in future years, the company’s lawn and garden sales could enjoy solid growth.

There’s one more reason for investors to like Scotts Miracle-Gro as well — its dividend. Scotts’ dividend currently yields 3.11%, a nice bonus on top of the company’s growth prospects.

Better buy

If you’re a more conservative investor, Scotts Miracle-Gro is probably the better pick for you. The company generates a steady cash flow, it’s profitable, and it pays out a solid dividend. 

On the other hand, more aggressive growth investors will probably like Canopy Growth. If the global marijuana market gets anywhere close to the levels many expect, Canopy will skyrocket. The major downside for Canopy Growth is that its valuation already assumes a lot of growth. Should anything arise that derails the company’s growth trajectory, its stock would almost certainly plunge.

But trading off risk for reward comes with the territory for investors. For those who don’t want to take on as much risk, go with Scotts Miracle-Gro. For investors comfortable with higher levels of risk, consider Canopy Growth. Both marijuana stocks should be winners over the long run.

The post Better Buy: Canopy Growth Corporation vs. Scotts Miracle-Gro Company appeared first on The Motley Fool UK.