High volatility comes with the territory when you invest in cannabis stocks. Anyone who follows these stocks knows that they’re likely to experience dramatic swings both up and down.
The most commonly used metric for measuring this volatility is the beta coefficient of a stock. Beta compares a stock’s movements relative to the overall market, or a certain stock index — typically the S&P 500 index.
I looked at the three-year beta calculated on a monthly basis for all stocks in the cannabis industry with a market cap of at least $200 million to find the three least-volatile pot stocks on the market right now. You might be surprised at the results…
1. CV Sciences
CV Sciences (OTC:CVSI) has the unique distinction of claiming a negative beta of 0.22. A negative beta occurs when a stock tends to move in the opposite direction of the market.
The stock technically isn’t a pot stock. It’s really a hemp stock, but CV Sciences is included in most lists of pot stocks you’ll find. The company ranks as one of the leaders in the hemp-derived cannabidiol (CBD) products market. It develops both consumer products and CBD-based drugs for smokeless tobacco cessation.
Business has boomed for CV Sciences since the passage of the 2018 farm bill last December. The company reported record-high revenue of $16.9 million in the second quarter. However, that figure wasn’t as high as what analysts expected. This disappointment combined with uncertainty about what actions the U.S. Food and Drug Administration (FDA) might take regarding CBD products has caused CV Sciences stock to plunge in recent months.
2. TerrAscend
TerrAscend (OTC:TRSSF) ranks as the second-least-volatile pot stock on the market with a beta of 0.34. Unlike CV Sciences, the small Toronto-based company is clearly engaged in the business of producing and selling marijuana.
In August, TerrAscend posted its highest quarterly revenue ever, with Q2 sales totaling 17.6 million in Canadian dollars. This reflected a 21% increase from the previous quarter. TerrAscend’s strong growth stemmed from higher sales in the Canadian adult-use recreational market.
The company isn’t limiting itself to just Canada, though. TerrAscend is expanding in New Jersey, which is on the path to legalize recreational marijuana. It’s building multiple cannabis dispensaries in California. The company also recently completed the acquisition of Pennsylvania-based Ilera Healthcare…
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