3 Most Popular Marijuana Stocks on Robinhood: Are They Buys?

You might not be surprised one bit that many Robinhood investors like pot stocks. After all, the trading platform especially appeals to millennials. And millennials support marijuana legalization in higher numbers than any other generation…

But which pot stocks do Robinhood investors like the most? Here are the three most popular marijuana stocks on the no-commission trading platform — and whether or not they’re smart picks to buy right now.

1. Aurora Cannabis

Aurora Cannabis (NYSE:ACB) ranked as Robinhood investors’ favorite stock of all in December 2019. It’s now 10 spots lower but still leads all other cannabis stocks on the list of the 100 most popular stocks on the platform.

Keep in mind that Aurora shares have plunged close to 60% so far this year. So why do Robinhood investors still like the stock so much? I think one factor is name recognition. The company has been in the news quite a bit over the last couple of years.

But there are also more substantive reasons for Aurora’s popularity. The cannabis producer is a leader in the Canadian adult-use recreational marijuana and medical cannabis markets as well as in Germany’s medical cannabis market. Aurora’s production costs are low relative to most of the industry while its production capacity is high. After the stock’s huge drop, the company’s market cap is also well below most of its top rivals.

2. Canopy Growth

Canopy Growth (NYSE:CGC) comes in second behind Aurora in popularity among Robinhood investors when it comes to marijuana stocks. That reflects some positive momentum for Canopy: In December, it was in third place.

Perhaps one reason why Canopy is viewed more favorably is its CEO, David Klein. The former Constellation Brands CFO took the helm at Canopy in January. Although it’s been a bumpy ride, Klein has taken firm steps to reduce the company’s spending and get Canopy on a path to profitability.

It could have also impressed Robinhood investors that Constellation upped its stake in Canopy Growth in May. This move reaffirmed the adult-beverage giant’s commitment to the long-term prospects for the cannabis industry and to Canopy’s role as a leader.

3. Cronos Group

Cronos Group (NASDAQ:CRON) slipped a spot from late last year to take the No. 3 position among the most popular pot stocks on Robinhood. It might not be a coincidence that Cronos also is lagging slightly behind Canopy in year-to-date stock performance.

The company hasn’t been in the spotlight all that much in recent months. So how is Cronos hanging onto its status near the top with Robinhood investors? One possibility is that Cronos has a solid U.S. presence thanks to its acquisition of Redwood last year. The deal brought the Lord Jones line of CBD products into Cronos’ lineup.

Cronos also could stand out because of its partnership with Ginkgo Bioworks to develop cannabinoids using fermentation processes. In addition, Robinhood investors might have liked the company’s moves to enter Israel’s medical cannabis market.

Are they buys?

My Motley Fool colleague Sean Williams listed Aurora and Cronos in his list of pot stocks to avoid like the plague in August. I think avoiding the plague would take a much higher priority over staying away from the two Canadian marijuana stocks, but Sean’s general sentiment is on point.

The problem for all three of the most popular pot stocks on Robinhood is that they…

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