Top Hemp Stocks to Watch in 2024

So you want to trade hemp stocks?

There’s a lot of confusion in the hemp sector. That’s because hemp is so closely related to marijuana — both are part of the cannabis plant.

But there are key differences between hemp and marijuana — and potential for both markets.

2018 was a landmark year for the hemp industry. That’s when hemp farming became legal in the U.S. again, paving the way for the resurgence of the hemp industry.

Although the industry’s had ups and downs, I think the hemp boom could be on its way.

Today we’ll dive into the hemp industry, look at some of the major players, and learn how to trade it.

Let’s go!

What Are Hemp Stocks?

The terms hemp and marijuana pop up a lot these days. It can make the distinction between marijuana and hemp confusing — even for lawmakers.

Although they both belong to the cannabis plant family, there’s a key difference.

Hemp contains 0.3% or less of the psychoactive chemical known as THC. Marijuana contains more THC. Basically, you can get high on marijuana but not on hemp.

Hemp stocks are the stocks of companies that deal with products and services centered around hemp.

How Are Hemp Plants Used?

Hemp is one of the fastest-growing plants. It has a long history of use for different products and used to be an extremely important crop.

In North America, it was used as early as the 1600s to manufacture rope, lamp fuel, clothing, and paper. Even the Declaration of Independence was drafted on hemp paper.

Unfortunately, concerns about the negative effects of marijuana grew in the first half of the 20th century. Hemp was guilty by association and lumped in as part of the problem.

In 1970, the Controlled Substances Act classified hemp as a Schedule I drug — making it illegal to grow and sell under most circumstances.

That changed in 2018. President Trump signed the 2018 Farm Bill, which opened the door for hemp products again.

Now, hemp popularity is on the rise because of the growing demand for cannabidiol (also known as CBD) products. These products are marketed as a natural remedy for different ailments with no psychoactive properties. 

So hemp-based products rich in CBD are more accessible than marijuana due to fewer legal constraints.

CBD, hemp seed grain, and fiber are the three main forms for hemp distribution and use. You can find its fiber in industrial applications like bioplastics, superconductors, and car parts.

And hemp seed oil comes from the seed grain. Some manufacturers use CBD from hemp in food, supplements, lotions, and even makeup.

Can You Trade Hemp Stocks?

Companies are taking advantage of the farming and commercial uses of hemp. That can mean trading opportunities.

Let’s take a look at some of the top hemp stocks to watch in 2024.

Top Hemp Stocks to Watch in 2024

1. Canopy Growth Corporation (NYSE: CGC)

Canopy Growth is one of the most recognizable cannabis companies in the world.

In 2018, Constellations Brands made a huge $4 billion investment into the company. That investment helped make it become one of the largest companies in the sector and brought respect for the brand.

Canopy Growth entered the U.S. hemp market in 2019 when it invested in a hemp industrial farm in New York. In May of the same year, it purchased a CBD-derived skincare company called This Works.

With all that expansion and the potential for the sector, CGC is one to watch.

2. CV Sciences, Inc. (OTCQB: CVSI)

CVSI produces the top-selling CBD oil brand in the U.S. — PlusCBD Oil. 

The highly successful product is already available in over 30 U.S. states and in over 2,000 retail locations.

Some analysts believe it’s only a matter of time before CVSI takes the top spot in the hemp-based market.

3. Cronos Group (NASDAQ: CRON)

Cronos is a CBD company with international production across several different continents.

It’s one of the most popular stocks in the hemp sector. 

In November 2018, it received $1.8 billion in investment funds from Altria Group, Inc — the tobacco giant. The partnership meant a huge influx of cash for CRON. It also meant one of the top existing distribution platforms for its products.

In 2018, CRON signed another partnership … this time with genetic engineering firm Ginkgo Bioworks. The relationship will enable CRON to produce biosynthetic cannabis and cut growing costs.

CRON has been very strategic to position itself for the future by focusing its spending mostly on research development.

With all this going on, it’s smart to keep an eye on Cronos.

4. Aurora Cannabis Inc. (NYSE: ACB)

ACB’s stock dropped heavily in the past year. And fundamentally, it might not look great.

But it’s still considered a sector leader and is popular with traders. It’s even been listed as one of Robinhood’s most widely held stocks.

If you know what you’re doing, there could still be potential. There’s a lot of news around this stock. And with the right news, we could see some price action.

Penny Hemp Stocks

Penny hemp stocks have stalled a bit, but again, with the right catalyst, things could move again.

Fair warning: A lot of these penny stocks companies have terrible fundamentals. But that doesn’t matter to most traders. It’s about taking quick profits and moving on.

There can be opportunity with penny stocks. Just know what you’re getting into.

Hemp Textile Stocks

A large part of the hemp market is attributed to the textile industry. Hemp beats cotton even when it comes to environmental demands.

Hemp produces twice as much fiber than cotton. It’s more durable and takes less water to grow. And it’s grown virtually pesticide-free.

Popular clothing brand Levi Strauss & Co. (NYSE: LEVI) has a product line that uses a blend of hemp and cotton. It plans to transition the blend into the core of its product line.

Regulation of Hemp Stocks in the U.S.

Although hemp is non-psychedelic and legal, its use continues to be held back. It still has ties to marijuana, which is still largely illegal in the U.S.

The FDA’s scrutiny of the safety of CBD doesn’t help, either.

For the most part, mass retailers aren’t willing to take on products that are under regulatory scrutiny.

There’s good news, though. The FDA is easing its stance against CBD … but Congress may beat them to the punch.

Either way, if regulators continue to loosen restrictions, it can increase market confidence. That could mean huge movements in this sector.

How to Identify Good Hemp Stocks to Trade

Identifying a good hemp stock to trade is no different than identifying any other potential stock to trade. 

Do your research, plan your trades, and only trade it if the setup fits your strategy. Knowing which stocks to trade comes with a lot of practice, but here are key things to look for.

1. Big Movers

Look for big percent gainers to find stocks that are already moving.

Using scanning software like StocksToTrade helps tremendously. StocksToTrade has built-in scans that are specifically designed to find stocks that are moving the most.

2. Look for Catalysts

Once you find a stock that’s moving, find out if there’s a reason. If there’s no good reason for the move, it will probably fizzle fast.

If the move follows a news catalyst, however, it might have enough power to fit your setups.

Some sectors have specialized news catalysts. For example, biotechs could get FDA approval for a new drug … or complete a phase of a major study. This is why you gotta do your homework.

StocksToTrade has a brand-new feature to help you catch the news that can really move stocks. Find out more about our game-changing Breaking News chat room here! 

3. Know Your Particular Chart Patterns

You must know chart patterns.

Don’t randomly enter a trade just because you think it’ll go higher. If you study charts long enough, you’ll see that there are patterns to price movements.

You can help limit your risks by recognizing particular patterns and entering trades at key positions.

Look for areas of support and resistance. This can help you see where it’s difficult for the price to break out. It’s a smart way to set your entries and exits. And it can prevent you from entering trades that have little chance of moving.

With StocksToTrade, you can use the news feature to see which catalysts caused certain moves on longer-term charts. You can then compare the movements of similar catalysts to help you make better trading decisions. Don’t use StocksToTrade? Sign up for a 14-day trial for just $7 today!

4. Watch for Volume

How bad would it be if you entered a trade and couldn’t get out of it?

Scary, right?

That’s why it’s important to watch trading volume.

Just because a stock is moving doesn’t mean there are enough traders in it. And if no one’s around to buy your shares when you want to sell, you’re out of luck.

Check the volume and make sure you can enter and exit trades easily. Also, the more volume the stock has, the more powerful the moves can be.

How to Buy Hemp Stocks

It’s just like buying any other stock. You need a computer, an internet connection, and an online brokerage account to get started.

There are tons of brokers to choose from, so be sure to do your research. Here’s a post to get you started.

Should You Trade Hemp Stocks?

A lot of investors and traders entered the hemp market because of all the potential it had. I think it still has potential. Make your watchlist and keep an eye out for news.

The sector has slowed down and had unforeseen challenges, but there’s still a growing demand for hemp products.

The markets constantly change. I think it’s a matter of time before the right catalysts get the sector moving again.

Conclusion

Now it’s time to start your own list of top hemp stocks to watch. Maybe the stocks here will make your list or inspire you to find your own.

Keep an eye on the industry and its stock leaders so you can be prepared when the sector heats up again.

Love hemp stocks? What’s on your list of top hemp stocks to watch? Leave a comment!